Gov. Bill Lee proposes temporarily lifting state, local grocery sales tax

CHICAGO (NewsNation) — Amid supply chain issues and the rising cost of labor across the nation has led to higher prices in the aisles of grocery stores.

Tennessee Gov. Bill Lee has proposed a 30-day suspension of state and local grocery sales tax to help families save money at checkout.

The move would provide some financial relief to state residents amid rising inflation nationwide, Lee said in a statement.

“As Americans see their cost of living skyrocket amid historic inflation, suspending the grocery tax is the most effective way to provide direct relief to every Tennessean,” Lee said.

The proposal will be included in the 2022-2023 budget amendment, which is expected to be delivered this week.

Republican House Speaker Cameron Sexton told reporters that the price tag for the proposed grocery sales tax holiday is still being worked out but likely would be between $80 million and $110 million.

Tennessee currently has a 4% tax on food items, and some local governments add taxes of more than 2% on top of that. For context: the average resident spends about $200 each month on food.

If Lee’s proposal is approved, three exclusions to the halted grocery tax will be included: candy, alcohol, and prepared meals. Twelve other states impose sales tax on groceries, but they haven’t yet said if they will follow suit.

Other tax cuts could be considered as lawmakers mull passage of the new budget, which is buoyed by positive revenues.

Republican Senate Speaker Randy McNally said lawmakers could consider waiving the vehicle registration fee for a year.

Meanwhile, Maryland, Connecticut and Georgia have already suspended their gas taxes.

The Hill and The Associated Press contributed to this report.

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