(The Center Square) – A pair of Tennessee Democrats are proposing the state drop its grocery sales tax while increasing business taxes to cover for the expense.
Tennessee Rep. Aftyn Behn, D-Nashville, and Sen. Charlane Oliver, D-Nashville, plan to propose a bill that will end the 4% state grocery tax and up to 2.75% local sales tax July 1.
“To offset any decrease to state and local revenue streams, the lawmakers will pair the grocery tax repeal with corporate tax reform that closes loopholes favored by billion-dollar corporations,” a press release on the proposal said.
The bill has yet to be filed or given a bill number in the House or Senate.
The Democrats noted that 13 states tax groceries.
“Instead of focusing on a bipartisan solution to inflation, Gov.[Bill] Lee announced he’s giving corporations yet another tax break despite wide support for eliminating the grocery tax,” Behn said in a statement. “It’s time to shift the tax burden off of us and onto mega-corporations who don’t pay what they owe.”
Republicans proposed and passed a three-month grocery tax holiday that ran from Aug. 1 and run through Oct. 31 and carried a fiscal note of $272.8 million.
Tennessee is $280 million below its budgeted estimates for taxes and fee collections through the first five months of the fiscal year and Tennessee Senate Finance Chair Bo Watson, R-Hixson, said state leaders will adjust spending plans based on those numbers.
Lee is expected to present his budget proposal and gives his State of the State speech at 6 p.m. on Feb. 5.
Tennessee Democratic leaders such as Sen. Jeff Yarbro, D-Nashville, have previously proposed cutting the grocery tax with a 2021 proposal to create a holiday from May through October that was rejected.
