The second leg of Tennessee’s back-to-back sales tax holidays in 2023 is now underway! As of August 1, all food and food ingredients are available tax-free for three months. The sales tax holiday is part of Gov. Bill Lee‘s Tennessee Works Tax Act, which he and conservatives in the Tennessee General Assembly called “the single largest tax cut in Tennessee history.” During the three-month period, Tennesseans are anticipated to save around $273 million in taxes total.
Here’s what’s included:
- Food and Food Ingredients:
- Sales of prepared food, dietary supplements, candy, alcoholic beverages, and tobacco are not included in items exempt during this period.
- Food and food ingredients are defined as liquid, concentrated, solid, frozen, dried, or dehydrated substances that are sold to be ingested or chewed by humans and are consumed for their taste or nutritional value. Food and food ingredients do not include alcoholic beverages, tobacco, candy, or dietary supplements.
Examples of food and food ingredients include: baby food; baking items such as baking powder, baking soda, biscuit mix, cake mixes, cocoa powder, flavoring extracts, flour, sugar, sugar substitutes and other sweeteners, frostings, yeast; bottled water (carbonated, flavored, sweetened or unsweetened); bouillon cubes; bread; butter, margarine, and shortening; cakes; canned foods; cereal; chip dip; chips (potato, corn, etc.); chocolate (unsweetened); coffee and teas (bags, leaves or bottled); condiments (e.g., ketchup, mustard, mayonnaise); cookies; cooking oil; dairy products, including cheese and yogurt; eggs, fish and meats, including lunch meats; food colorings; frozen meals; fruit (fresh or unsweetened dried) and fruit juices; ice; ice cream and sherbet; jams and jellies; nuts; pasta; pastries, pies and pretzels; peanut butter; pickles; popcorn; popsicles; poultry; pumpkins;
raw eggs, fish and meats requiring cooking; relishes; salad dressing and mixes and salad oil; soft drinks; vegetables (fresh, frozen, dried, etc.) and vegetable juices. Please note, this is only a partial list of food items that are tax exempt.
Things that are not included in the sales tax suspension and still carry their 4% state sales tax rate plus any local sales tax rates include alcoholic beverages, tobacco, candy, dietary supplements, and prepared food.
The sales tax holiday runs through October 31.
