NASHVILLE, Tenn. (WKRN) — Republicans may still be cooking up a plan to cut Tennessee’s grocery tax, but the effort could be losing steam after Gov. Bill Lee did not include funding in his proposed budget to make up for the lost revenue.
Both Republicans and Democrats have filed bills to end Tennessee’s 4% grocery tax this legislative session, but their plans look very different.
The Republican bill would eliminate the grocery tax without raising taxes elsewhere, which House Majority Leader William Lamberth said the supermajority has been dedicated to looking into.
📧 Have breaking news come to you: Subscribe to News 2 email alerts →
“I am in favor of repealing the entire grocery tax. I understand that we can’t do it in one year. I know that would be a lot to take in in one year, but we can try,” Leader Lamberth said. “We’ve been dedicated and dedicated in the past, and Republicans have reduced the grocery tax by 1.25%, and we’re dedicated to looking at that again.”
However, it might be difficult with no money in Gov. Lee’s proposed budget to make up for the estimated $700 million loss of revenue the grocery tax generates for the state.
Speaker of House Cameron Sexton added Tennessee’s taxes are low as is, and would be open to considering a tax cut on specific “staple” items instead.
“If you want to look at milk and eggs and butter and bread, let’s have a conversation, but to say we’re going to repeal the whole grocery tax, and we want to give someone a tax break for someone for buying a Snickers bar over here or a frozen pizza, yeah, I don’t foresee that,” Speaker Sexton said.
However, in the Senate, Lt. Gov. Randy McNally told reporters enacting any kind of tax relief would likely be difficult due to “tight revenues” this fiscal year.
“I think it’s something we might look at, but this year revenues are tight,” Lt. Gov. McNally said. “About the last 12 years, I think we’ve given over $2 billion in tax relief.”
Senate Finance Committee chairman, Sen. Bo Watson (R-Hixson) added the House and Senate will have a conversation about cutting the grocery tax, but it all depends on recurring revenues.
House Democrats told reporters it proves where Republicans’ priorities lie.
“Instead of helping people who are buying groceries every week, these guys have prioritized tax cuts for people who buy stocks, a tax cut for highly paid professionals, and two separate tax cuts that primarily benefit out-of-state corporations,” Sen. Jeff Yarbro (D-Nashville) said. “This is a case of deeply mismanaged priorities over a number of years, and it’s going to start being felt by Tennessee families more and more.”
Democrats’ bill to cut the grocery tax would enact additional taxes on corporations that do business in Tennessee to make up for the lost revenue. Republicans have called it a tax increase.
“Our plan doesn’t necessarily increase taxes on anyone. It simply collects taxes from corporations that have received multiple handouts,” House Democratic Caucus Chair, John Ray Clemmons (D-Nashville) said.
Democrats sponsored a similar bill last legislative session, but it did not move forward. Their proposed legislation could face the same fate this year.
“What I disagree with is the socialist approach to this where you have to cut taxes over here and raise them over here, which is what the Democrats want to do,” Leader Lamberth said. “That’s just robbing Peter to pay Paul. It’s a ridiculous assertion.”
Ten states, including Tennessee, impose a tax on groceries, and three allow local governments to tax food. Some estimate cutting the grocery tax would save the average Tennessee family around $400 annually.
