SB 2 TN

Passed One Chamber

Taxes - As introduced, enacts the "End the Grocery Tax by Closing Corporate Loopholes Act." - Amends TCA Title 57 and Title 67.

TN · session 114 · Senate · bill

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Introduced Nov 12, 2024

Latest action (Jul 30, 2026) Engrossed; ready for transmission to House

Summary

Tennessee SB 2 eliminates the sales tax on food and food ingredients, effective July 1, 2025. The bill requires counties and municipalities to receive state compensation equal to the revenue they would have lost from the exemption, based on reported exempt food sales. The bill removes provisions that previously directed sales tax revenue from food to the state's K-12 education fund. The bill also adjusts licensing requirements for businesses, removing restrictions that tied the 20% minimum food sales requirement to taxable sales only, allowing the requirement to apply to all food sales whether taxed or exempt. The bill is titled the "End the Grocery Tax by Closing Corporate Loopholes Act."

AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.

Sponsor (1)

Oliver Democratic · primary

Action history (15)

Nov 12, 2024 Filed for introduction · lower
Jan 14, 2025 Introduced, Passed on First Consideration · lower
Jan 15, 2025 Passed on Second Consideration, refer to Senate Finance, Ways, and Means Committee · upper
Feb 18, 2025 Sponsor(s) Added. · lower
Feb 18, 2025 Refer to Senate F,W&M Revenue Subcommittee · lower
Mar 11, 2025 Placed on Senate FW&M Revenue Subcommittee calendar for 3/18/2025 · lower
Mar 18, 2025 Refer to Senate Finance, Ways & Means Committee w/ negative recommendation · lower
Apr 14, 2025 Placed on Senate Finance, Ways, and Means Committee calendar for 4/15/2025 · lower
Apr 14, 2025 Rule #83(8) Suspended, to be heard in Senate Finance, Ways & Means Committee on 4/15/2025 · lower
Apr 17, 2025 Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2025 · lower
Apr 14, 2026 Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2026 · lower
Apr 14, 2026 Placed on Senate Finance, Ways, and Means Committee calendar for 4/20/2026 · lower
Apr 20, 2026 Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2026 · lower
Jul 30, 2026 Signed by Senate Speaker · upper
Jul 30, 2026 Engrossed; ready for transmission to House · lower

Subjects

Taxes

Text versions (1)

The published texts of this bill as it moves through the legislature. Each links to the official document on the state legislature site. Data from OpenStates.

Current Version · PDF

Full text

Full text imported from capitol.tn.gov

HOUSE BILL 2 By Behn

SENATE BILL 2 By Oliver AN ACT to amend Tennessee Code Annotated, Title 57 and Title 67, relative to taxation. BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE: SECTION 1. This act is known and may be cited as the "End the Grocery Tax by Closing Corporate Loopholes Act." SECTION 2. Tennessee Code Annotated, Section 67-6-228(a), is amended by deleting the subsection and substituting instead the following: (a) Notwithstanding this chapter to the contrary, except as otherwise provided in subsection (b), the retail sale of food and food ingredients shall not be taxed. SECTION 3. Tennessee Code Annotated, Section 67-6-103(c)(2), is amended by deleting the following language: Revenue generated from one-half percent (0.5%) of the tax rate provided in § 67-6-228 shall continue to be deposited in the state general fund and earmarked for education purposes in kindergarten through grade twelve (K-12) regardless of whether the tax rate provided in § 67-6-228 is reduced below six percent (6%). SECTION 4. Tennessee Code Annotated, Section 67-6-103(u), is amended by deleting the subsection and substituting instead the following: (u) Notwithstanding the allocations provided for in subsection (a), there must be allocated and distributed to the counties and municipalities an amount substantially equal to the amount that would have been allocated to the counties and municipalities under subdivision (a)(3) but for the exemption from sales tax applicable to the retail sale of food and food ingredients. The allocation provided in this subsection (u) must be

SB0002 000212 -1-

based on the reporting of exempt sales of food and food ingredients and any other data or information the commissioner deems relevant. SECTION 5. Tennessee Code Annotated, Section 67-6-329(a), is amended by adding the following as a new, appropriately designated subdivision: ( ) Food and food ingredients; SECTION 6. Tennessee Code Annotated, Section 67-6-329(a)(18), is amended by deleting the language "or food and food ingredients". SECTION 7. Tennessee Code Annotated, Section 67-6-229, is amended by deleting the language "food and food ingredients or". SECTION 8. Tennessee Code Annotated, Section 57-3-802(1), is amended by deleting the language "that derives at least twenty percent (20%) of its sales taxable sales from the retail sale of food and food ingredients for human consumption taxed at the rate provided in § 67-6228(a)" and substituting instead the language "that derives at least twenty percent (20%) of its sales from the retail sale of food and food ingredients for human consumption". SECTION 9. Tennessee Code Annotated, Section 57-3-806(d)(1), is amended by deleting the language "must maintain a minimum of twenty percent (20%) of the licensee's sales taxable sales from the retail sale of food and food ingredients for human consumption taxed at the rate provided in § 67-6-228(a)" and substituting instead the language "must maintain a minimum of twenty percent (20%) of the licensee's sales from the retail sale of food and food ingredients for human consumption". SECTION 10. This act takes effect July 1, 2025, the public welfare requiring it.