Proposed ‘food holiday’ would eliminate sales tax in June, July
NASHVILLE, Tenn. (WMC) - An East Tennessee lawmaker is proposing a new kind of tax break that could help you this summer at the grocery store.
Currently, all Tennesseans pay a 4-percent state sales tax on food items. But if passed, food would be tax free this summer starting June 1 to July 31 cutting grocery bills by $4 for every $100 you spend.
“I think for some Tennesseans this will have a major impact. For many of us it really won’t make much difference but for those who are living on the margins, the working poor, those who have children they are trying to feed, I can’t give you a dollar amount but I can tell you with certainty it’s going to make a difference,” said Rep. Patsy Hazlewood, (R) District 27.
The idea of a Food Tax Holiday comes from Rep. Patsy Hazlewood who serves part of Hamilton County.
For now, it’s a one-time tax break on food during the months of June and July. Those months picked specifically because kids are out of school.
“We know that a number of our children receive breakfast and lunch at school during the school year. They don’t get that during the summer and a lot of those children are not as well fed,” said Rep. Hazlewood .
During those two months, food banks often see a dwindling supply because of the high demand.
Several Finance Subcommittee representatives praised the legislation. One even suggesting to make it permanent.
“This is not just a piece of legislation it’s a statement. A unification between both parties to serve Tennesseans I believe in a manner that they need right now,” said Rep. Rick Staples, (D) District 15.
But Governor Bill Lee’s administration has already said it’s against the measure a spokesperson said, “The governor is always open to finding prudent ways to cutting taxes, and his FY2021 budget proposal does cut the professional privilege tax in half and returns $100 million to county and municipal governments. We believe our plan is the most efficient and accountable way to put more money in the pockets of hardworking Tennesseans and doesn’t present situations that could disrupt state services, jeopardize the state’s bond ratings, or throw the budget out of balance.”
The cost to the state for the two-month tax break $88 million.
With this legislation, it would only provide a tax break for June and July of 2020.
This bill sits in limbo now until Tennessee lawmakers take final action this spring on the state’s annual budget.
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