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SB 1367

Taxes, Sales - As introduced, exempts from the state sales and use tax the retail sale of food and food ingredients. - Amends TCA Title 57, Chapter 3 and Title 67.

114th Regular Session (2025-2026) Introduced by Bo Watson

SB 1367 eliminates Tennessee sales tax on groceries and food ingredients, reducing costs for consumers but potentially cutting state revenue by hundreds of millions annually.

Placed on Senate Finance, Ways, and Means Committee calendar for 4/20/2026
#sales #taxes
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Bill Summary · SB 1367

Legislative bill overview

SB 1367 would exempt food and food ingredients from Tennessee's state sales and use tax, effectively making groceries tax-free. The bill amends the state's tax code to remove these items from the current sales tax base.

Why is this important

Food purchases represent a significant portion of household spending, particularly for lower-income families. This exemption would reduce the regressive nature of sales taxes, which disproportionately burden lower-income households since they spend a higher percentage of income on food. However, it would also reduce state revenue substantially, potentially requiring cuts to state services or alternative revenue sources.

Potential points of contention

  • Revenue impact: Removing food from the sales tax base would significantly reduce state tax revenue; the state would need to either cut services, raise other taxes, or find alternative funding sources
  • Definition challenges: Determining what qualifies as "food and food ingredients" versus prepared foods, supplements, or other items could create implementation complexities and disputes
  • Regressive tax trade-off: While this helps lower-income families, it primarily benefits all income levels equally in absolute terms; some argue targeted programs are more efficient poverty relief tools

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

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