Sen. Charlane Oliver, D-Nashville, and Rep. Aftyn Behn, D-Nashville, have reintroduced legislation aimed at eliminating Tennessee’s state sales tax on groceries while protecting funding for essential public services.
The proposal, called the ‘End the Grocery Tax by Closing Corporate Loopholes Act,’ would repeal the state’s four percent sales tax on groceries, one of the highest in the nation. Supporters say the tax places a heavy burden on working families at a time when food prices remain high.
The plan would replace the more than $800 million in annual state revenue currently generated by the grocery tax by closing corporate tax loopholes and creating a corporate minimum tax.
State tax records indicate that many businesses operating in Tennessee pay little or no state income tax, including some large corporations. The legislation would require companies to report worldwide profits, preventing the use of offshore tax shelters to avoid state taxes.
Oliver said the bill is designed to provide tax relief for families without creating budget shortfalls.
“Our bill offers a responsible path forward: eliminate the grocery tax while replacing the lost revenue by ensuring corporations pay their fair share,” Oliver said.
Behn said the legislation addresses both rising food costs and fairness in the tax system.
“Working families pay taxes every time they buy groceries, while some billion-dollar corporations pay little or nothing,” Behn said. “Families are paying more for basic food items than they were just a few years ago. It’s time to provide real relief.”
Several other proposals to repeal the grocery tax have been introduced this year, but critics say those measures do not include plans to replace the lost revenue.
Senate Bill 2511 is scheduled for its first hearing March 17 in the Senate Finance Subcommittee.
