MEMPHIS, Tenn. — Just hours ago in Nashville, lawmakers approved Governor Bill Lee's $52.8 billion dollar budget, which includes a 30-day suspension of the tax on groceries.
Gov. Lee released a statement in March saying in part, “Suspending the grocery tax is the most effective way to provide direct relief to every Tennessean."
During the month of August, buyers could save anywhere between $5 to $10 on a $100 grocery bill. This tax break is in response to surging inflation.
Prices for almost everything are higher than before. According to the latest Consumer Price Index, this inflation surge is the biggest year-over-year increase since December 1981. Prices rose 8.5% in March 2022 compared to March 2021.
According to the Tennessee Department of Revenue, our state sales tax rate on food is 4%. These foods are packaged or in their original form and not prepared or served as a ready-to-eat meal.
Here’s a list of some items currently taxed at this rate:
- baby food
- bottled water
- canned foods
- chips, dips
- raw fish, meat, poultry
- herbs and spices
- ice cream
- lunch meat
- uncooked pasta
- salad dressings
- soft drinks
- trail mix
Other items, including prepared food, candy dietary supplements, tobacco & alcoholic drinks, are taxed at 7% plus local sales tax.