Tennessee House Bill HB1842

Tennessee 2025-2026 Regular Session

• Introduced: 1/21/26
• Refer: 2/2/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 57, Chapter 3 and Title 67, relative to taxation.

Summary

HB1842 would eliminate Tennessee’s state sales tax on retail food and food ingredients, with limited exceptions preserved in the bill. It amends the sales tax code so that, as a general rule, food and food ingredients are not taxed under the retail sales tax provisions, while also clarifying that food and food ingredients remain taxable under a separate part of the tax code. The bill takes effect July 1, 2026. The measure also makes conforming changes throughout the Tennessee Code to remove references that tie other tax provisions and licensing rules to food being taxed at the retail sales tax rate. In particular, it deletes language that earmarked a portion of the food tax for K-12 education and revises provisions affecting certain alcohol license classifications that depend on a business deriving a specified share of sales from food and food ingredients. Overall, the bill would reduce the tax burden on groceries and related food purchases while requiring statutory cleanup in related tax and licensing sections.

Impact

HB1842 would significantly change Tennessee’s tax law by exempting retail sales of food and food ingredients from the general sales tax, subject to exceptions referenced in the bill. It also removes a statutory earmark that directed a portion of the food tax revenue to the state general fund for K-12 education, which could reduce dedicated education funding tied to that revenue stream. Related provisions in Titles 57 and 67 are amended to conform to the new tax treatment, including rules for certain licensees whose eligibility depends on food sales and references to food being taxed at the retail rate.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or formal support/opposition in the available record. Based on the bill text alone, the measure appears to be framed as a tax relief proposal for consumers purchasing food and food ingredients. The absence of discussion and voting history means overall sentiment cannot be measured from the provided materials.

Contention

The main points of contention likely involve the fiscal tradeoff between lowering grocery taxes and losing revenue for the state general fund and K-12 education. Another likely issue is the downstream effect on statutes that use taxable food sales as a threshold for licensing or regulatory purposes, especially in the alcohol licensing context. Because no committee discussion is available, it is not possible to identify specific legislators, agencies, or stakeholder groups raising these concerns from the record provided.