NASHVILLE, Tenn. — Gov. Bill Lee is proposing several initiatives in his 2023-24 budget, including bringing back the popular grocery sales tax holiday that Tennessee implemented for a month in Aug. 2022.
As part of his $55.6 billion proposed budget, Lee proposed $412 million in tax cuts.
“Last August, we gave Tennessee families a one-month break from grocery taxes, to provide relief amid nationwide inflation. We should do that again this year, but let’s extend it to three consecutive months,” Lee said.
Assuming the governor's proposed budget passes and the sales tax holiday is held in a similar fashion in 2023, Tennesseans would be able to buy most food and food ingredients without having to pay sales tax during the entire 3-month period. The tax holiday in 2022 did not apply to things like tobacco products, alcoholic beverages, candy, dietary supplements and prepared food.
On top of the proposed grocery sales tax holiday, Lee wants to cut taxes for small and large businesses and transition to a single sales factor for corporate taxes, which is beneficial for large multi-state companies headquartered in Tennessee because it only taxes the company for its in-state sales.