House Bill 21, sponsored by Davis, amends various sections of the Tennessee Code Annotated related to the taxation of food and food ingredients. The bill establishes that the retail sale of food and food ingredients will not be taxed, with specific exceptions outlined in subsections (b) and (c). It introduces a new subsection stating that food and food ingredients are taxable under part 7 of the chapter, despite previous provisions. Additionally, the bill modifies the allocation of revenue generated from sales tax, ensuring that counties and municipalities receive an amount equivalent to what they would have received if food sales were not exempt from sales tax.

The bill also makes several deletions and substitutions to existing language regarding the sales tax on food. Notably, it removes references to the tax rate on food and food ingredients and adjusts the criteria for businesses that derive a significant portion of their sales from food. The changes aim to clarify the tax structure and ensure proper revenue distribution to local governments. 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