House Bill 1842 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 shall not be taxed, while also introducing a new provision that specifies these items are taxable under part 7 of the chapter. Additionally, it removes the requirement that revenue from a portion of the tax rate on food sales be earmarked for K-12 education, allowing for more flexibility in the allocation of these funds.

The bill also makes several adjustments to existing language regarding the sales of food and food ingredients. It modifies the criteria for businesses to qualify for certain sales tax exemptions by removing specific references to the tax rate and instead focusing on the percentage of sales derived from food and food ingredients. The changes aim to simplify the tax structure and clarify the definitions related to food sales, with the act 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, 67-6-329(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