Tennessee lawmakers began the first General Assembly session of 2025 by introducing a slew of legislation, including a bill to abolish Tennessee’s grocery tax.
SB 0002, the “End the Grocery Tax by Closing Corporate Loopholes Act,” aims to eliminate the tax on food and ingredients. Democrat Sen. Charlene Oliver authored the bill and introduced it to the state legislature on Jan. 14th.
“It is outrageous that some billion-dollar corporations are paying a lower state tax bill than teachers, nurses and factory workers,” Oliver said. “Working families and small businesses are the backbone of this economy, and they deserve a legislature that works — as hard as they do — to lower costs and help them build a good life.”
The average American household spent $475 monthly on groceries in 2022, according to the latest data from the U.S. Bureau of Labor Statistics, an increase of over 20% from 2019.
Another study conducted by Consumer Affairs, using the same data, stated that 15% of Tennesseans’ monthly income went to groceries, slightly above the national average of 13%.
Maria Salcedo, an MTSU freshman studying exercise science, usually budgets $250 monthly for groceries. She said that cutting the tax could free up some of her grocery budget for what she calls “accessories” to her current grocery list, like coffee creamer or syrup.
“So little things… like stuff you don’t necessarily need, but you prefer to have in your meals,” Salcedo said. “I don’t need red pepper flakes, but that’s just one of the spices I love using… I try to just keep my coffee with one type of creamer or no creamer at all because I just feel like those things are kind of more expensive, and I’m like, ‘I don’t need it.’”
Tennessee is one of 13 states that imposes a tax on groceries and has the fourth highest grocery tax in the country at 4%.
Republicans are also open to eliminating the grocery tax, with Rep. Elaine Davis proposing separate but identical legislation in the state House.
MTSU economics professor and state Rep. Charlie Baum said he is open to eliminating the grocery tax, but only if it doesn’t increase the state’s debt.
“Trading the grocery tax for debt is not fiscally responsible,” Baum said.
Eliminating the tax does not come without risks. Of the $14 billion Tennessee generates in revenue, over $750 million comes from the grocery tax.
Some Democratic legislators fear that all that lost revenue might lead to spending cuts in critical programs, like healthcare and education. This led Democratic Rep. Aftyn Behn to propose increasing taxes on high-income businesses to fill the potential hole in the state budget, which Republicans opposed when she first introduced the idea in 2023.
Baum argues that the state should temporarily eliminate the tax for a few months instead.
“It might make more sense to continue doing what the Tennessee General Assembly has done several times in the past, which is to eliminate the grocery tax temporarily for only a couple of months during the year,” Baum said.
Tennessee had a grocery tax holiday from Aug. to Oct. 2023, during which, according to The Tennessean, shoppers saved nearly $290 million in taxes. That averages out to $100 saved per family during the three-month holiday.
If either Rep. Oliver’s or Rep. Davis’s proposals are approved by the state legislature, which has a Republican supermajority, the bill will take effect later this year on July 1.
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