Shoppers welcome TN grocery tax holiday after food price hike

WSMV4's Michael Warrick reports.
Published: Apr. 28, 2023 at 8:55 PM CDT
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NASHVILLE, Tenn. (WSMV) - Tennessee families will save about $100 each from a grocery tax holiday that will extend three months starting in August, according to the state’s Department of Revenue.

State lawmakers passed the Tennessee Works Act this week, which will get rid of the tax on groceries from August through October. The tax break applies to food and food ingredients at grocery stores. Alcohol, tobacco, candy and dietary supplements do not qualify.

“I think it’s exciting for families and I’m hoping it just encourages more people to eat at home, to prepare food for themselves because it seems like a more affordable option,” shopper Embrey Brannon said. “Just every little bit of a discount can help.”

Everyday shoppers will welcome the food tax relief. Last month, food prices were 8.5% higher than they were in March 2022, according to the USDA. This year, food prices are expected to increase 6.5%, that same data shows.

“I paid $8.50 in sales tax today and so that should go down, and every dollar helps,” Larry Cochran said, looking at his grocery receipt. “Maybe gives you a little discretionary money to do something fun with.”

Last year, state lawmakers passed a grocery tax holiday that lasted one month. This year, it will last three months. Local governments will be reimbursed by the state for any tax revenues lost during the period.

“I am very looking forward to those few months to save money because I’m going to stock my cupboards, my freezer,” Elizabeth Rogers said.

The grocery tax holiday is part of the the Tennessee General Assembly’s bill approving more than $400 million in tax cuts for Tennessee families and businesses through the Tennessee Works Tax Act, marking one of the largest tax cuts in Tennessee history and supporting future economic growth.