House Bill 1530 proposes amendments to the Tennessee Code regarding the sales tax on food and food ingredients. The bill establishes that the retail sale of food and food ingredients will not be taxed, as indicated by the deletion of the previous subsection in Section 67-6-228(a) and its replacement with new language affirming this exemption. However, it also introduces a new subsection (c) stating that food and food ingredients are taxable under part 7 of the chapter, which may create a nuanced tax structure. 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 had the sales tax on food not been exempted.

Further amendments include the removal of specific language regarding the allocation of tax revenue for education purposes and adjustments to the definitions and requirements for businesses that derive a significant portion of their sales from food and food ingredients. The bill aims to clarify the tax obligations and revenue distribution related to food sales while ensuring that local governments are compensated for the loss of tax revenue due to the exemption. The act is set to take effect on July 1, 2026.

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