Tennessee has reduced its burdensome sales tax on groceries. So our question to you: Is there more change in your pockets today than there was yesterday?
Probably not, but give it time.
You are not likely to notice it right away, but it could result in an extra buck or two remaining in your wallet at the end of the week.
Gov. Bill Haslam signed a measure Monday to lower the state’s portion of the sales tax on groceries from 5.5 percent to 5.25 percent. The reduction doesn’t apply to restaurant meals, so you’ll have to eat at home to take advantage of the tax break.
Even with the cut, Tennessee still has one of the highest combined state and local sales tax rates in the nation. Tennesseans for Fair Taxation also says our state has one of the most inequitable, antiquated and plainly unfair tax systems in the nation. TFT says a family in Johnson City making less than $22,000 a year pays more than three times the taxes as a portion of its income than families with much higher annual incomes.
The Tennessee General Assembly agreed earlier this year to a quarter-cent decrease of the state sales tax on certain groceries. That was, at best, a modest start to addressing the problem.
The fact remains that Tennessee government operates on a sales tax system held hostage to the ebb and flow of the economic cycle. What good does it do to remove the sales tax on food today if an economic downturn forces lawmakers to restore the very same tax in the future?
So take advantage of those pennies you will save at the grocery store in the coming months by putting them away for a rainy day. You might need them in a year or two.