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Bill would exempt 'healthy' foods from state grocery tax while raising other food taxes to remain revenue-neutral
Summary
SB 2337 would eliminate the state's 4% grocery tax on specified healthy food categories (produce, lean proteins, whole grains, plain dairy and infant nutrition) and raise tax on other items to 7% to remain revenue neutral; committee gave a positive recommendation but members raised administrability concerns.
Speaker Hale explained that amendment 015547 to SB 2337 would remove the state's 4% tax on healthy food items ‘‘while leaving the local taxes as is’’ and that other items would be taxed at 7% to keep the plan revenue neutral.
Hale outlined categories that would be exempted — ‘‘fresh and frozen produce, fresh and frozen lean proteins, whole grains, plant based proteins, plain dairy, and infant nutrition’’ — and said the bill is intended to encourage healthier eating while preserving revenue neutrality. Senator Yarbrough asked about administrability and used plain vs. fruit-flavored yogurt as an example, expressing concern about how retailers and tax administrators would implement the exemptions.
The sponsor acknowledged the complexity and said the house sponsor would navigate details, then the committee voted to report the bill with a positive recommendation (vote recorded as 4 ayes, 1 no). The fiscal note showed uncertain elements and that the change is designed to be revenue neutral according to the amendment language.
