Gov. Lee proposes suspension of all grocery sales taxes
NASHVILLE, Tenn. (WSMV) - Gov. Bill Lee proposed on Thursday a 30-day suspension of state and local grocery sales taxes to give Tennesseans a break from rising inflation costs.
“As Americans see their cost-of-living skyrocket amid historic inflation, suspending the grocery tax is the most effective way to provide direct relief to every Tennessean,” Lee said in a statement on Thursday. “Our state has the ability to put dollars back in the pockets of hardworking Tennesseans, and I thank members of the General Assembly for their continued partnership in maintaining our fiscally conservative approach.”
The proposal for a break in grocery sales tax is welcome news to shoppers who said basically every dollar, especially these days, counts.
“Each month it’s more and more. Now with how high the fuel prices are, it’s just getting passed down to the little guy,” Kirk Robinson said.
Shoppers are feeling the weight of higher costs and they said the idea of a little relief in the form of grocery sales tax helps.
“It all helps. I met an older woman who is retired, and she had to have been high 80s, and she said, ‘I might have to go back to work,’ picking little items here and there. I feel sorry for her,” Robinson said. “Any way that they could help prices go down to fight inflation.”
“I think it’s a great idea, anything to help anybody. I’m very blessed that I can afford groceries but there’s a lot of people that are struggling,” Lea Van Cleave said.
The suspension of the grocery sales tax is an idea Democratic lawmakers applaud and say they have been pushing for a long time.
“I’m excited he is following Democrats lead on this issue. For the last 10 years Democrats have filed at least 29 bills to cut the sales tax on food items across the state of Tennessee,” Rep. John Ray Clemmons, D-Nashville, said. “We’re glad Governor Lee is finally getting on board with an issue that we’ve been talking about. Anything we can do working across the aisle to put money back in the pockets of working Tennessee families is a good thing.”
In Tennessee, experts said groceries are taxed differently.
“As long as the groceries are not prepared meals, they’re taxed at 4% plus whatever the local sales tax is, and the average local tax is 2.6%,” Beverly Moran, Professor of Law, Emerita at Vanderbilt University Law School, said. “The average we’re paying is about 6.5% in taxes on groceries.”
How much does a break on the grocery sales tax save people?
“If you take a $150 and you take 6.5% of that, you’re talking about $9 to $10 a week that people would be saving on groceries,” Moran said. “According to the USDA, if you have a family of four, you can expect for thrifty people that they’ll be paying $130 a week up (for groceries) through low cost which will be up to $200 a week and moderate cost will be about $250 a week.”
Grocery shoppers told News4 this is a good first step, but more steps could be taken.
“Any help is welcome, but they could do so much more,” Robinson said as he loaded groceries into his vehicle.
“Everyone buys groceries, not everyone buys gas, but still the gas tax something with that, it kind of trickles down that would help affect the cost of groceries,” Van Cleave said.
“Just recently a colleague of mine and I called for a suspension of gas and diesel taxes across the state of Tennessee,” Clemmons said. “Because 90 days, it we put it into effect let’s say May 15, that will extend through the summer so families that are traveling on vacation would really reap the benefits of that.”
News4 asked Clemmons how quickly people could see that break in the grocery sales tax proposed by the governor.
“He hasn’t put anything in writing yet. If he does the budget process, it won’t be passed until we adopt the budget, and then once we adopt the budget, whenever the enactment date of that would be the new fiscal year,” Clemmons said. “The new fiscal year starts in July, depending on the language of the budget, it could go into effect at that time.”
In an announcement made on Thursday morning, Lee announced his proposed grocery tax suspension will be included in the Fiscal Year 2022-2023 budget amendment, which is planned for delivery on March 29.
The governor also hosted a roundtable with several business owners in West Tennessee on Thursday afternoon to discuss his tax cut proposal and other economic challenges that Tennesseans face.
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