SB2314 • 2026

Taxes, Sales

AN ACT to amend Tennessee Code Annotated, Title 57, Chapter 3 and Title 67, relative to taxation.

Taxes

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: Yarbro, Miller
Last action: 2026-04-14
Official status: Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2026
Effective date: Not listed

Plain English Breakdown

The official summary does not provide details about how local governments will handle taxes on food items, which is mentioned in the candidate explanation but not supported by the provided source material.

Food Tax Exemption Act

This bill changes Tennessee's tax laws to remove state sales and use taxes on most food items but keeps taxes on prepared foods, alcoholic beverages, candy, dietary supplements, and tobacco.

What This Bill Does

Removes the state sales and use tax on food and ingredients for human consumption except for specific items.
Keeps a tax on prepared food, alcohol, candy, dietary supplements, and tobacco at regular rates.
Updates state laws to reflect these changes in taxation.

Who It Names or Affects

Tennessee residents who buy food and related items.

Terms To Know

Sales Tax: A tax charged by the government on the sale of goods or services.
Use Tax: A tax that must be paid to a state when something is purchased from an out-of-state seller who does not collect sales tax for the buyer's home state.

Limits and Unknowns

The bill does not specify how local governments will handle taxes on food items.
It remains unclear what specific impact this change will have on education funding since part of the revenue from food taxes was earmarked for K-12 education.

Bill History

2026-04-14 Tennessee General Assembly
Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2026
2026-04-09 Tennessee General Assembly
Placed on s/c cal Finance, Ways, and Means Subcommittee for 4/14/2026
2026-03-17 Tennessee General Assembly
Refer to Senate F,W&M Committee w/ negative recommendation
2026-03-11 Tennessee General Assembly
Placed behind the budget
2026-03-10 Tennessee General Assembly
Placed on Senate FW&M Revenue Subcommittee calendar for 3/17/2026
2026-03-04 Tennessee General Assembly
Placed on s/c cal Finance, Ways, and Means Subcommittee for 3/11/2026
2026-02-24 Tennessee General Assembly
Refer to Senate F,W&M Revenue Subcommittee
2026-02-18 Tennessee General Assembly
Action Def. in s/c Finance, Ways, and Means Subcommittee to 3/11/2026
2026-02-11 Tennessee General Assembly
Placed on s/c cal Finance, Ways, and Means Subcommittee for 2/18/2026
2026-02-05 Tennessee General Assembly
Passed on Second Consideration, refer to Senate Finance, Ways, and Means Committee
2026-02-02 Tennessee General Assembly
Introduced, Passed on First Consideration
2026-02-02 Tennessee General Assembly
Filed for introduction
2026-02-02 Tennessee General Assembly
Assigned to s/c Finance, Ways, and Means Subcommittee
2026-02-02 Tennessee General Assembly
P2C, ref. to Finance, Ways, and Means Committee
2026-01-22 Tennessee General Assembly
Intro., P1C.
2026-01-21 Tennessee General Assembly
Filed for introduction

Official Summary Text

Present law imposes a state sales and use tax on food retail sales at a 4% tax rate for food and
food ingredients for human consumption. This bill eliminates such tax except for the following items, which must be taxed at the rate levied on the sale of tangible personal property at retail:
p
repared food
, a
lcoholic beverages
, c
andy
, d
ietary
s
upplements
, and t
obacco
.

T
his bill clarifies that its provisions do not eliminate local government tax rates on food and food ingredients that are taxable under the "1963 Local Option Revenue Act."

Current Bill Text

Read the full stored bill text

HOUSE BILL 1842
By Miller

SENATE BILL 2314
By Yarbro
SB2314
011528
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 57,
Chapter 3 and Title 67, relative to taxation.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-6-228(a), is amended by deleting
the subsection and substituting instead the following:
(a) Notwithstanding this chapter to the contrary, except as otherwise provided in
subsections (b) and (c), the retail sale of food and food ingredients shall not be taxed.
SECTION 2. Tennessee Code Annotated, Section 67-6-228, is amended by adding the
following language as a new subsection (c):
Notwithstanding § 67-6-702(a) to the contrary, food and food ingredients are
taxable under part 7 of this chapter.
SECTION 3. Tennessee Code Annotated, Section 67-6-103(c)(2), is amended by
deleting the following language:
Revenue generated from one-half percent (0.5%) of the tax rate provided in § 67-6-228
shall continue to be deposited in the state general fund and earmarked for education
purposes in kindergarten through grade twelve (K-12) regardless of whether the tax rate
provided in § 67-6-228 is reduced below six percent (6%).
SECTION 4. Tennessee Code Annotated, Section 67-6-329(a), is amended by adding
the following as a new, appropriately designated subdivision:
( ) Food and food ingredients;
SECTION 5. Tennessee Code Annotated, Section 67-6-329(a)(18), is amended by
deleting the language "or food and food ingredients".

- 2 - 011528

SECTION 6. Tennessee Code Annotated, Section 67-6-229, is amended by deleting the
language "food and food ingredients or".
SECTION 7. Tennessee Code Annotated, Section 57-3-802(1), is amended by deleting
the language "that derives at least twenty percent (20%) of its sales taxable sales from the retail
sale of food and food ingredients for human consumption taxed at the rate provided in § 67-6-
228(a)" and substituting instead the language "that derives at least twenty percent (20%) of its
sales from the retail sale of food and food ingredients for human consumption".
SECTION 8. Tennessee Code Annotated, Section 57-3-806(d)(1), is amended by
deleting the language "must maintain a minimum of twenty percent (20%) of the licensee's sales
taxable sales from the retail sale of food and food ingredients for human consumption taxed at
the rate provided in § 67-6-228(a)" and substituting instead the language "must maintain a
minimum of twenty percent (20%) of the licensee's sales from the retail sale of food and food
ingredients for human consumption".
SECTION 9. This act takes effect July 1, 2026, the public welfare requiring it.