Tennessee Giving Residents 3-Month Grocery Tax Suspension

In an effort to save Tennesseeans an estimated $273 million in total taxes, Gov. Bill Lee has announced a three-month grocery tax suspension, running from Aug. 1 to Oct. 31 throughout the Volunteer State. The move is part of the Tennessee Works Tax Act, which marks the single largest tax cut in Tennessee history, and allows Tennessee residents to save up to 6.75% in state and local sales tax on food and food ingredients.

According to the state Department of Revenue, food and food ingredients are defined as liquid, concentrated, solid, frozen, dried or dehydrated substances that are sold to be ingested or chewed by humans for their taste or nutritional value. Alcoholic beverages, prepared food, tobacco, candy and dietary supplements are not included under the definition.

[Read more: "Grocery Sales Moderate in June"]

“In Tennessee, we cut taxes any chance we get because families should keep more of their own hard-earned dollars. Starting Tuesday, we’re inviting Tennesseans to take advantage of savings at the grocery store this August through October,” said Gov. Lee. “I thank the General Assembly for partnering to deliver three months of savings for Tennessee taxpayers.” 

“We’re proud to be able to offer three months of tax-free groceries to help hardworking Tennesseans save money,” said Department of Revenue Commissioner David Gerregano. “I thank the Governor and General Assembly for their efforts to steward taxpayer dollars responsibly and cut taxes for Tennessee families.” 

In June, Illinois rolled back a grocery tax suspension set in place in mid-2022. The state has since resumed its 1% grocery tax on items meant to be consumed offsite. The tax did not apply to liquor, foods with cannabis, candy or soda.

Elsewhere in the United States, state legislators in Alabama passed a bill to eventually halve the state’s grocery tax from 4% to 2%. Currently on the governor’s desk, the tax rate would be cut to 3% in September and reduced another percentage point within a year if certain conditions are met.

Tennessee, Illinois and Alabama are among the 13 U.S. states that currently impose a grocery tax. The other states include Mississippi, South Dakota, Missouri, Virginia, Utah, Arkansas, Hawaii, Oklahoma, Idaho and Kansas.