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HB 1842

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 Larry Miller

HB 1842 exempts all food and food ingredients from Tennessee sales tax, reducing consumer grocery costs but cutting state revenue without identified offsets.

Taken off notice for cal in s/c Finance, Ways, and Means Subcommittee of Finance, Ways, and Means Committee
#sales #taxes
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Bill Summary · HB 1842

Legislative bill overview

HB 1842 would exempt food and food ingredients from Tennessee's state sales and use tax. This is a significant revenue measure that would remove a currently taxable category of goods from the state's tax base, applying to all retail food sales going forward.

Why is this important

Food sales taxes disproportionately affect lower-income households, who spend a larger percentage of their income on groceries. Eliminating this tax would provide direct cost-of-living relief at checkout but would reduce state revenue substantially, requiring either budget cuts or alternative revenue sources to maintain current spending levels.

Potential points of contention

  • Revenue impact: Removing sales tax on all food sales represents significant lost state revenue (potentially hundreds of millions annually), with unclear plans for offsetting this loss
  • Equity concerns: While benefiting all consumers, the tax cut provides larger absolute savings to higher-income households that purchase more food overall
  • Implementation complexity: Changes to tax code administration, business compliance systems, and defining what qualifies as "food" versus prepared/restaurant meals require careful specification
  • Budgetary timing: The bill is currently placed "behind the budget," suggesting competing fiscal priorities in the legislative session

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

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