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HB 1767

Taxes, Exemption and Credits - As introduced, exempts the retail sale of food and food ingredients from the sales and use tax when purchased by families with qualified dependents that meet certain household income requirements. - Amends TCA Title 67, Chapter 6.

114th Regular Session (2025-2026) Introduced by John Clemmons

Creates income-based grocery sales tax exemption for families with qualified dependents, reducing tax revenue while lowering food costs for lower-income households.

Taken off notice for cal in s/c Finance, Ways, and Means Subcommittee of Finance, Ways, and Means Committee
#exemptionandcredits #taxes
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WeVote Research Nonpartisan
Bill Summary · HB 1767

Legislative bill overview

HB 1767 would exempt families with qualified dependents meeting certain income thresholds from paying Tennessee's sales tax on food and food ingredients. The bill amends Tennessee's tax code to create this targeted sales tax exemption for households below specified income levels.

Why is this important

Food purchases represent a significant portion of household expenses for lower-income families, and sales taxes on groceries are considered regressive—taking a larger percentage of income from those who earn less. This exemption could reduce the cost of living for qualifying families, though it would also reduce state tax revenue that funds public services and infrastructure.

Potential points of contention

  • Revenue impact: The bill's fiscal effect on the state budget is unknown without specific income threshold data and estimated eligible household numbers; this could affect funding for education, healthcare, and other programs
  • Implementation complexity: The bill requires tracking which purchases qualify and verifying household income and dependent status at point-of-sale, which may be administratively challenging for retailers
  • Definition ambiguity: The bill references "qualified dependents" and "certain household income requirements" without specifying exact thresholds, raising questions about who actually qualifies and potential inequities in application
  • Partial solution: Food tax exemptions benefit grocery purchases but not prepared foods, potentially creating fairness concerns and gaps in assistance for families relying on convenience foods or meals outside the home

Compiled from official sources — confirm details with the bill’s official record.

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