MEMPHIS, Tenn. – Tennessee is one of eight states that still taxes groceries.
There’s a new bipartisan push to eliminate the tax.
“If they eliminate it, that would be more beneficial for us,” said Shresta Reddy, who just graduated from the University of Memphis with her master’s degree.
Reddy and fellow graduate Bhavitha Cherukuri are looking for work.
They both want to pay less for their groceries.
“If they eliminate the food tax, that’s going to be a happy moment for us, because the cost is going to be less,” said Cherukuri.
During this election year, both Republicans and Democrats introduced bills to end the 4% state grocery tax in Tennessee.
However, critics said the state would have to find almost $900 million in the budget to make up for lost revenue.
“Our unique tax structure makes it a little bit more challenging and limiting if we wanted to eliminate any of the taxes that we have or if we wanted to raise large new sums of money,” explained Mandy Spears, executive vice president of the Sycamore Institute.
Because Tennessee has a constitutional ban on an income tax, Spears told FOX13 the state is very reliant on sales tax.
Low-income families are hit by this tax the hardest.
“Grocery taxes are considered a regressive tax because people with lower incomes spend a larger share of their money on basic needs like food,” Spears said.
State representative Aftyn Behn, D-Nashville, wants to eliminate the grocery tax by getting rid of what she calls “corporate tax loopholes.”
According to joint research from Rep. Behn and Sen. Charlane Oliver, D-Nashville, 24% of corporations with incomes over $1 billion paid zero income taxes.
“I don’t know about you, but every year I file one tax refund, and, if I’m lucky, I get a refund back,” Behn said. “But unfortunately, this surfaced that there are loopholes that these corporations are exploiting.”
On Tuesday, her bill was placed behind the budget, meaning it would not be given priority this session.
The same thing happened to the Republican bill in the House, sponsored by Rep. Todd Warner, R-Chapel Hill.
“I want to think we can recoup some of this money across the state when we give that sales tax money for groceries back,” Warner said last month.
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