Gov. Bill Lee proposes 30-day suspension on state, local grocery sales tax

The suspension will be included in the fiscal year 2022-2023 budget amendment
Tennessee Governor Bill Lee is announcing a 30-day suspension proposal of state and local grocery sales tax.
Published: Mar. 24, 2022 at 7:40 AM EDT
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KNOXVILLE, Tenn. (WVLT) - Tennessee Governor Bill Lee is announcing a 30-day suspension proposal of state and local grocery sales tax.

A release from the governor’s office says the proposal aims to provide direct financial relief to Tennesseans amid surging inflation nationwide.

The suspension will be included in the fiscal year 2022-2023 budget amendment, which will be delivered on Tuesday March 29.

“As Americans see their cost-of-living skyrocket amid historic inflation, suspending the grocery tax is the most effective way to provide direct relief to every Tennessean,” said Gov. Lee. “Our state has the ability to put dollars back in the pockets of hardworking Tennesseans, and I thank members of the General Assembly for their continued partnership in maintaining our fiscally conservative approach.”

According to the Department of Revenue, right now customers pay 4% on items like baby food, bread and canned goods. Meals or snacks prepared inside local markets are taxed at the regular sales tax rate of 7%, plus local sales tax.

If passed, the state could lose out on millions, and without provisions, local governments could take a hit. However, Rep. Jeremy Faison told WVLT News that wouldn’t happen.

“We have that (the money) right now, because of all the revenues that we’ve been able to collect because Tennessee’s doing well,” said Faison. “The local governments, we will hold them harmless. What that means is the state will fill in the local sales tax that you would typically benefit from your local grocery store.”

The governor will speak Thursday in Covington to discuss the new tax cut proposal and discuss local impacts of nationwide economic challenges.

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