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April 5, 2007 – For immediate release...
Contacts:
- Dave McIlwaine, 865-584-5112 (hm)
- Bill Howell, 615-751-5011 (off) &
615-289-1397 (cell)
- Brian Miller, 865-687-9600, ext. 12 (off)
& 865-712-8006 (cell)
- Tiffany Hartung, 865-687-9600, ext. 12
& 865-685-3715 (cell)
New Bi-partisan Consensus Emerging on Need for Food Tax
Cut
On Wednesday, House Majority Leader Rep. Gary Odom announced
a Democratic initiative to eliminate the tax on certain key
food items. This comes on the heels of various Republican
initiatives to cut the state's high food tax, including talk
of a two-month food tax holiday during November and December.
Last week, even Gov. Bredesen, who had previously opposed
such food tax cuts, agreed that it may be time for one.
"The great news for Tennesseans is that consensus is
building across party lines that the time for a cut in Tennessee's
high food tax is upon us," states Dave McIlwaine, Board
Chair of Tennesseans for Fair Taxation (TFT), a statewide
coalition that has long advocated for a responsible cut in
the states food tax. McIlwaine adds, "This emerging consensus
goes to prove that putting food on the family table is not
a partisan issue. It's a human rights issue. It's a family
issue."
While TFT finds hope in the emerging bi-partisan support,
they point out that there are a lot of details still to be
worked out. "The real question now is, what will the
food tax cut look like?" continues McIlwaine. "As
this debate moves on, we want to make sure that whatever food
tax cut does pass, that it is permanent cut tied to a recurring
revenue source like an increase in the cigarette tax, instead
of some temporary food tax cut tied to one-time surplus that
may or may not be manageable in the future and will have to
be renewed each year."
Tennessee currently has the highest state and local food
tax in the nation with an average rate of 8.35%. Already,
35 states do not tax groceries and the list is growing. Arkansas
voted earlier this year to cut it's food tax in half beginning
July 1 and debates are taking place in both Mississippi and
Alabama to eliminate their food taxes entirely. Kentucky already
fully exempts food. North Carolina and Georgia have no state
tax on food, leaving only local taxes of 2 to 2.5%. Virginia
and Missouri tax food at a significantly reduced rate.
In 2002, TFT and legislative allies helped prevent the sales
tax hike increase from being applied to grocery food. This
meant that for the first time in state history, food was taxed
at a lower rate than non-food items (up to 8.75% vs. 9.75%
on non-food items). As a result, the registers for all the
state grocery stores have already been programmed to distinguish
food items from candy and other non-food items. The current
definition of food also excludes prepared foods and restaurant
meals. "Now that the registers are already programmed,
all we need to do is change the rate," states McIlwaine.
"This means grocers will have an easy time adapting to
the new rate as long as legislators don't try to tinker with
the definition of food."
"This week we made a major breakthrough with leaders
from both sides of the aisle now calling for a cut in the
state's food tax, but we know we cannot let up now,"
concludes McIlwaine. "We're going to keep up the pressure
in the coming weeks to make sure that whatever food tax does
pass, that it is permanent, year-around, and applies to all
food items. We don't need gimmicks. We don't need token gestures.
We need a meaningful and fiscally-responsible cut in the state
food tax."
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