A new in-depth report is strengthening the push to eliminate Tennessee’s state sales tax on groceries without cutting essential public services. The analysis shows that closing corporate tax loopholes could generate nearly $900 million in revenue—enough to offset the cost of repealing the grocery tax entirely.

Sen. Charlane Oliver (D-Nashville) and Rep. Aftyn Behn (D-Nashville) have introduced Senate Bill 2 and House Bill 2, known as the ‘End the Grocery Tax by Closing Corporate Loopholes Act.’ The legislation offers a clear choice: provide tax relief to working families or continue allowing large multinational corporations to exploit tax code loopholes.

“This report is a wake-up call,” said Sen. Oliver. “Tennessee’s working families shouldn’t have to pay one of the highest grocery taxes in the nation while billion-dollar corporations hide profits overseas. By closing corporate tax loopholes, we can generate nearly $900 million in revenue—enough to eliminate the state grocery tax without cutting a single dollar from schools, infrastructure, or healthcare. The choice is clear. Help working families or keep letting big corporations game the system.”

Rep. Behn echoed that sentiment, emphasizing the fairness of tax reform. “This shocking report confirms what we’ve been saying all along. Tennessee can eliminate the grocery tax, without cutting essential services, by closing corporate tax loopholes,” she said. “Through worldwide combined reporting, we could bring in nearly $900 million—funds that should be going to our schools, roads, and healthcare, not hidden in foreign tax shelters. It’s time to stop letting multinational corporations dodge their fair share while hardworking families shoulder the burden.”

The report, prepared by the Institute on Taxation and Economic Policy (ITEP), highlights the potential benefits of worldwide combined reporting, a policy that prevents corporations from shifting income offshore to avoid taxes.

Key findings include:

• Nationwide adoption of worldwide combined reporting could raise an estimated $18.7 billion in additional state revenue.
• Tennessee alone stands to gain approximately $891 million in annual revenue by implementing this policy.
• The reform would level the playing field between small businesses and multinational corporations while reducing reliance on regressive sales taxes that disproportionately impact low-income families.

Carl Davis, ITEP’s research director and one of the report’s authors, emphasized the significance of the policy change. “Worldwide combined reporting would ensure that companies pay taxes based on their profits and business fundamentals, not the level of creativity their accountants bring to their tax returns,” said Davis. “Any lawmaker who is sick and tired of U.S. companies pretending they earn the bulk of their profits in Ireland and the Cayman Islands should be taking a hard look at worldwide combined reporting right now.”

While Tennessee’s Republican-controlled legislature has historically resisted changes to corporate tax structures, public opinion strongly favors cracking down on corporate tax avoidance.