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Two different grocery-tax proposals advance to study: combined reporting to eliminate grocery tax and a nutrition-based basket proposal pulled for revision
Summary
Lawmakers debated competing approaches to grocery taxes: HB 2,007 would end the state portion of the grocery tax funded by closing corporate tax loopholes via combined reporting; HB 2,570 proposed a two-basket nutrition tax restructure and was taken off notice for more work.
Representative Vang (sponsor of HB 2,007) told the committee her bill would "end the state portion of tax on all groceries, and it holds local governments completely harmless" by closing corporate tax loopholes through worldwide combined reporting. She cited a study that "combined reporting would generate nearly $891,000,000 annually for Tennessee," and said Department of Revenue data show many profitable corporations report zero excise tax.
Later in the calendar, Chairman Kumar presented a different approach with HB 2,570: a two-basket plan that would make a list of staple healthy foods tax-free (basket A) while taxing other foods (basket B) at a higher rate to achieve revenue neutrality. Chairman Kumar framed the bill as a public-health measure tied to obesity prevention and asked colleagues for input. Because the chairman and other members asked for more time to collaborate, he agreed to take HB 2,570 off notice so sponsors and stakeholders can refine the revenue and category definitions.
Committee members acknowledged strong public interest in grocery tax relief and asked staff to review fiscal notes and legal mechanics for both proposals; both items were noted for further fiscal review and stakeholder consultation before any floor action.
