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June 12, 207 – For immediate release...
Contacts:
- Nashville: Phil Schoggen, TFT volunteer,
615-356-2381 (hm) or 615-972-9607 (cell)
- Knoxville: Dave McIlwaine, TFT volunteer
and Board Chair, 865-584-5112 (hm) or 865-310-5905 (cell)
- Memphis: Jocelin Keglar, TFT volunteer,
901-859-7001 (cell) or Beverly Owens, TFT staff, 901-406-7878
(cell)
- Statewide: Tiffany Hartung, TFT staff,
888-671-5188 x12 (office) or 865-684-3715 (cell)
Coalition calls food tax cut a good first step... Big win
for Tennesseans
On June 11, the Tennessee House and Senate both voted to
give Tennesseans the first-ever reduction of the state's high
food tax. The half-cent food tax reduction is part of a broader
budget bill that is now headed to the Governor's desk where
he is expected to sign it into law. Tennesseans for Fair Taxation
(TFT) and others welcome this food tax cut as a very positive
step in the right direction.
Effective January 1, 2008, the state food tax will be cut
from 6 to 5.5%. Local governments add anywhere from 2 to 2.75%
to the state rate. The average local rate is 2.35%. Until
the January 1 food tax reduction takes effect, Tennessee's
average state and local food tax is 8.35%, giving Tennessee
the dubious honor of having the highest average food tax in
the nation. Beginning in January however, that average combined
rate will drop to 7.85%, moving Tennessee into third place,
below Oklahoma and Alabama.
"Our food tax will still be among the highest in the
nation, but this is nonetheless a very positive step in the
right direction and we applaud the legislators who helped
make this possible," states Dave McIlwaine, State Chair
of TFT. "Of course we would have liked a much bigger
food tax cut, but the Governor's opposition made anything
more than a half-cent cut difficult. Clearly, much work remains
to be done in the coming years to build on this victory. We
hope we can get the Governor's support for a much larger cut
next time around."
Until 2002, grocery food was taxed at the same rate as non-food
items. Legislators excluded groceries from the 2002 sales
tax increase. This meant that for the first time, groceries
were taxed at a lower rate than non-food items (6% for groceries
vs. 7% for non-food items). The scheduled reduction in the
food tax to 5.5% will be the first time the food tax has ever
actually been reduced, a welcome change for groups like TFT
and others who have played a big role in advocating the new
food tax cut, including MANNA, Save Our Cumberland Mountains,
the League of Women Voters, and others. Even grocers operating
along the state lines have advocated for the food tax cut.
"This is a victory for all Tennesseans," adds McIlwaine.
Thirty-five (35) states currently do not levy a state sales
tax on food. Of the 15 states remaining that do tax food at
the state level, most tax food at a reduced rate. In Tennessee,
and in nearly all other cases, the reduced rate or full exemption
is applied to grocery food, but not restaurant meals, candy,
prepared foods, or other non-grocery items. "The tax
on groceries is one of the most cruel and unjust taxes any
government can level," declares Phil Schoogen, a TFT
volunteer from Nashville. "Most states recognize this
simple fact which is why most states choose not to tax food."
TFT had originally joined legislators, including a bi-partisan
group of nearly 30 sponsors, in supporting the Food Tax -
Cigarette Tax Swap. This bill would have cut the state food
tax in half, from 6 to 3%, paid for with an increase in the
state cigarette tax. Both a cigarette tax increase and a food
tax cut were a part of the final package in the end. "While
the 42-cent cigarette tax increase was technically dedicated
to education, no matter how they shuffle the money on paper,
the end result is $40 million of the $220 million cigarette
tax increase was used to cut the state's high food tax. That's
what we wanted... a fiscally-sound cut in the state food tax
paid for with an increase in the cigarette tax so important
public structures like education, health care, and environmental
protection would not be hurt."
TFT announced that its statewide Board of Directors will
be meeting in late July to celebrate this year's victory and
to start making plans for 2008 and future reductions in the
state food tax. For additional information about TFT, visit www.fairtaxation.org
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