House Bill 2, also known as the "End the Grocery Tax by Closing Corporate Loopholes Act," aims to eliminate the sales tax on food and food ingredients in Tennessee. The bill amends several sections of the Tennessee Code Annotated, specifically Section 67-6-228(a), which will now state that the retail sale of food and food ingredients shall not be taxed. Additionally, it removes the requirement that a portion of the revenue from the food tax be earmarked for K-12 education, thereby allowing for a complete exemption from sales tax on food items.

The bill also includes various amendments to ensure that local governments receive funding equivalent to what they would have received from the sales tax on food, based on exempt sales reporting. Other changes involve clarifying language regarding the percentage of sales derived from food and food ingredients for businesses, ensuring that the focus remains on the retail sale of these items. The act is set to take effect on July 1, 2025.

Statutes affected:
Introduced: 67-6-228(a), 67-6-228, 67-6-103(c)(2), 67-6-103, 67-6-103(u), 67-6-329(a), 67-6-329, 67-6-329(a)(18), 67-6-229, 57-3-802(1), 57-3-802, 57-3-806(d)(1), 57-3-806