posted May 8, 2006
Sen. Mae Beavers (R-Mt. Juliet) and Rep. Phillip Johnson (R-Pegram) today renewed their call to take the sales tax off food beginning this July in the next fiscal year.
Their proposal, contained in Senate Bill 2785/House Bill 2588, reduces the tax annually by a half-cent until it reaches 0% in 2017-2018.
“Our proposal takes the sales tax off food and does not replace it with a new tax on another item. The money is readily available with the current revenue projections,” stated Sen. Beavers. “Some merely want to swap this tax for another tax. Our plan proposes to reduce the level of state government spending in a fiscally responsible method.”
“SB 2785 phases out the food tax by gradually reducing it annually in each budget cycle. That way, we can rein in spending as state government learns how to live within its means,” concluded Sen. Beavers.
Rep. Johnson stated, “It seems everyone is looking for a place to spend the extra revenue. We know exactly where it needs to go and that is back to the people of Tennessee. The people can spend their money more efficiently than state government can.”
SB 2785 would reduce the state sales tax on food by one-half percent per fiscal year from its current level of 6%. The annual change in rate would have almost no impact on businesses which collect sales tax for the state and local governments because the state sales tax on food is already being collected at a different rate than the general state sales tax of 7%, the two officials said.
They said retailers, merchants and others "would simply plug the new rate into any software that calculates the state sales tax on food items once a year. Smaller businesses without software would simply use a new state sales tax look-up table."
It would cost a little less than $35 million per year, they said.
Senate Majority Leader Ron Ramsey (R-Blountville) is prime co-sponsor on the measure. The companion bill, House Bill 2588, is being carried by Rep. Phillip Johnson (R-Pegram).
Sen. Beavers represents Senate District 17 which includes Cannon, Clay, DeKalb, Macon, Smith, Trousdale, and Wilson counties, and part of Sumner County.
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