Taxes

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

Taxes

Active

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

Sponsor: Oliver, Behn
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 exact impact on education funding, which relies partly on sales taxes from food, remains uncertain.

End the Grocery Tax Act

This bill removes Tennessee's tax on food and food ingredients for human consumption but keeps taxes on certain items like prepared foods and alcohol.

What This Bill Does

Removes the state sales tax on most food and food ingredients sold in Tennessee.
Keeps a tax on specific items such as prepared food, alcoholic beverages, candy, dietary supplements, and tobacco.

Who It Names or Affects

People who buy groceries in Tennessee

Terms To Know

city tax rate: The tax rate set by a city or town for certain goods and services.
incorporated city or town: A city or town that has been officially recognized as such under state law.

Limits and Unknowns

The bill does not specify how the loss of revenue will be made up.
It is unclear what happens to existing local tax exemptions for food after this act takes effect.

Bill History

2026-04-14 Tennessee General Assembly
Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2026
2026-04-08 Tennessee General Assembly
Placed on s/c cal Finance, Ways, and Means Subcommittee for 4/14/2026
2026-03-25 Tennessee General Assembly
Placed behind the budget
2026-03-18 Tennessee General Assembly
Placed on s/c cal Finance, Ways, and Means Subcommittee for 3/25/2026
2026-03-17 Tennessee General Assembly
Refer to Senate F,W&M Committee w/ negative recommendation, as amended
2026-03-10 Tennessee General Assembly
Placed on Senate FW&M Revenue Subcommittee calendar for 3/17/2026
2026-02-24 Tennessee General Assembly
Refer to Senate F,W&M Revenue Subcommittee
2026-02-05 Tennessee General Assembly
Passed on Second Consideration, refer to Senate Finance, Ways, and Means Committee
2026-02-04 Tennessee General Assembly
Assigned to s/c Finance, Ways, and Means Subcommittee
2026-02-04 Tennessee General Assembly
P2C, ref. to 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
Intro., P1C.
2026-01-22 Tennessee General Assembly
Filed for introduction

Official Summary Text

This bill eliminates the tax on food retail sales at a 4% tax rate for food and food ingredients for human consumption,
except for the following items, which must be taxed at the rate levied on the sale of tangible personal property at retail:
prepared food, alcoholic beverages, candy, dietary supplements, and tobacco.

MUNICIPAL TAXES

Present law
defines

a "
city tax rate
"

to
mean, with regard to a city or town that is located within a county that has not adopted the maximum rate of 2.75%
,
a rate adopted by the city or town that is equal to the difference between the county rate and the maximum rate authorized
by state law
.
A
city or town that has adopted a city tax rate
may do either of the following
:



Levy a tax on the retail sale of food and food ingredients within the jurisdiction of the city or town at a rate lower than the city tax rate levied for other privileges, goods, and services
.


Exempt from the city tax rate the retail sale of food and food ingredients within the city or town.

Present law requires t
he incorporated city or town
to
furnish a certified copy of the adopted ordinance authorized to the department of revenue.

The reduced tax rate or exemption becomes effective on the first calendar day of the month occurring at least 60 days after the department receives the certified copy.

The reduced tax rate or exemption applies only to tax periods beginning on or after October 1, 2024.
The levying of a
reduced tax rate or an exemption is not subject to the approval of the voters
.

This bill removes the present law described under this heading.

Current Bill Text

Read the full stored bill text

HOUSE BILL 2007
By Behn

SENATE BILL 2511
By Oliver
SB2511
011450
- 1 -

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

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. This act is known and may be cited as the "End the Grocery Tax Act."
SECTION 2. 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
subsection (b), the retail sale of food and food ingredients shall not be taxed.
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 67-6-103(u), is amended by deleting
the subsection and substituting instead the following:
(u) Notwithstanding the allocations provided for in subsection (a), there must be
allocated and distributed to the counties and municipalities an amount substantially
equal to the amount that would have been allocated to the counties and municipalities
under subdivision (a)(3) but for the exemption from sales tax applicable to the retail sale
of food and food ingredients. The allocation provided in this subsection (u) must be
based on the reporting of exempt sales of food and food ingredients and any other data
or information the commissioner deems relevant.

- 2 - 011450

SECTION 5. 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 6. Tennessee Code Annotated, Section 67-6-329(a)(18), is amended by
deleting the language "or food and food ingredients".
SECTION 7. Tennessee Code Annotated, Section 67-6-229, is amended by deleting the
language "food and food ingredients or".
SECTION 8. Tennessee Code Annotated, Section 67-6-702(a), is amended by deleting
subdivision (1)(B) and redesignating subdivision (1)(A) as subdivision (1), and by deleting the
language ", subject to subdivision (a)(1)(B),".
SECTION 9. Tennessee Code Annotated, Section 67-6-705, is amended by deleting
subsection (d).
SECTION 10. 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 11. 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 12. This act takes effect July 1, 2026, the public welfare requiring it.