Tennessee Gov. Bill Haslam on Monday signed legislation that reduces the state sales tax on groceries from 5.25 percent to 5 percent in July.
It was the last step in a two-year effort to cut the state portion of the grocery sales tax to 5 percent, a press release said.
Haslam held a ceremonial bill signing on Monday at Sloan’s Grocery in Vonore in Monroe County.
In 2012, the Tennessee General Assembly passed, and the governor signed, the first step in reducing the state portion of the sales tax on groceries, lowering the rate from 5.5 percent to 5.25 percent, the press release said.
“We’re lowering taxes and balancing the state budget by managing conservatively, making strategic investments in our priorities, and finding new ways to make government more efficient and effective,” Haslam said. “The sales tax on food impacts all Tennesseans, and I applaud the General Assembly for passing this important piece of legislation this year.”
The bill, SB 199/HB 193, was introduced by the governor and was one of two tax cuts passed by the legislature and signed by Haslam this year as the state “continues its work toward providing the best customer service at the lowest possible cost to taxpayers,” the release said.
The bill was sponsored by Senate Majority Leader Mark Norris, a Collierville Republican; House Majority Leader Gerald McCormick, a Chattanooga Republican; and Rep. Ryan Haynes, a Knoxville Republican.
The press release said Haslam included $23 million in the budget for the next fiscal year to fund the legislation. The legislation goes into effect July 1.
The reduced tax rate does not apply to prepared foods, such as a meal at a restaurant, candy, alcoholic beverages, or tobacco.