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January 18, 2007 – For Immediate Release...
Contacts:
- Brian Miller, 865-687-9600, x14
- Tiffany Hartung, 865-687-9600, x12
- Bill Howell, 615-751-5011
- Beverly Owens, 901-276-0802
States across country race to end their food tax
while Tennesseans continue to pay nation's highest food
tax
As of January 1, 2007, the list of states that exempt grocery
food from their sales tax grew yet again, bringing the total
number of states that exempt food to 35 (or 36 is one includes
DC). Of the fifteen states left that still tax food, seven
tax food at a reduced rate and five offer rebates to low-
and moderate-income taxpayers for food taxes paid. Meanwhile,
Tennesseans continue to pay the highest food tax in the nation
with an average state and local rate of 8.35%.
"Most states recognize that food is a basic human necessity
that should not be taxed," states Dick Williams of Tennesseans
for Fair Taxation (TFT), "and states across the country
are exempting or reducing their sales tax on food. It's time
Tennessee does the same."
While Wyoming eliminated its food tax on January 1 of this
year, states in the South have been doing the same in recent
years. Georgia, North Carolina, and Louisiana abolished their
state food taxes in '98, '99, and '03 respectively, though
local taxes still apply in each case. Other states are taking
gradual steps to end their food tax. Virginia cut its food
tax in July '05, South Carolina cut their food tax in October
'06, Utah cut their food tax in January '07, and West Virginia
is scheduled to cut their food tax in July '07.
[Note: Since this release, Arkansas has also
voted to cut their state food tax in half, effective July
2007.]
"For Tennesseans everywhere, the food tax amounts to
a whole month's worth of groceries that they give up each
year," adds Williams. While elimination of the food tax
would help all Tennessee families, those that would benefit
the most are low and middle-income families who spend a much
larger portion of their income on groceries. Most low-income
families for example spend about a fourth of their total budget
on groceries.
"This is about helping Tennessee families make ends
meet, but it's also about helping grocers in border counties
compete," states Williams, "It's a win-win for everyone
really." Half of Tennessee's population live in counties
that border another state, every one of which has a lower
food tax. The lowest is Kentucky which has no food tax at
all, followed by Virginia, North Carolina, and Georgia, whose
combined state and local tax is about 1/4th the Tennessee
rate. "Keeping Tennessee dollars in Tennessee while helping
families put food on the kitchen table at the same time just
makes sense."
TFT is advocating legislation again in 2007 that will take
the first important steps at eliminating Tennessee's food
tax. The Food Tax - Cigarette Tax Swap, would cut the state
food tax in half from 6 to 3% (local government add-ons of
up to 2.75% would not be affected), with the replacement revenue
coming from a 44 cent increase in the state cigarette tax.
Even after passage of the Tax Swap, the new cigarette tax
rate of 64 cents a pack would still be 2/3rd the national
average of $1 a pack.
"This is about addressing a long overdue cut in Tennessee's
food tax while adding some common sense to Tennessee's tax
system," concludes Williams.
Additional information:
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