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HB 21

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 Elaine Davis

Eliminates Tennessee state sales tax on grocery food and ingredients, reducing costs for consumers but requiring lawmakers to offset substantial lost state revenue.

Placed behind the budget
#sales #taxes
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Bill Summary · HB 21

Legislative bill overview

HB 21 would eliminate Tennessee's state sales and use tax on retail food and food ingredients, amending the state's tax code. This would make groceries and food items tax-free at the point of purchase, similar to policies already in place in several other states.

Why is this important

Food taxes are considered regressive—they take a larger percentage of income from lower-income households than wealthy ones. Removing this tax could reduce grocery costs for all Tennesseans, particularly benefiting families struggling with food affordability. However, the state would lose significant tax revenue that currently funds government services.

Potential points of contention

  • Revenue impact: Eliminating food sales tax would reduce state revenue substantially; sponsors would need to propose offsetting revenue sources or budget reductions
  • Definition complexity: Determining what qualifies as "food and food ingredients" versus non-taxable items (prepared foods, supplements, beverages) creates implementation challenges
  • Equity concerns: While helping low-income families, the tax cut also benefits wealthier households proportionally, raising questions about targeted relief effectiveness
  • Budget consequences: With the bill placed "behind the budget," lawmakers must decide whether this fits within available resources or requires cuts elsewhere

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

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