Three-month Grocery Tax Holiday Approved by TN Lawmakers


The Tennessee General Assembly has approved more than $400 million in tax cuts for Tennessee families and businesses through the Tennessee Works Tax Act, marking one of the largest tax cuts in Tennessee history and supporting future economic growth.

The legislation includes a three-month grocery tax holiday and an optional paid family leave tax credit for companies to support Tennessee families.

“We are proud to continue that legacy this year by putting dollars back in the pockets of Tennesseans and supporting future economic growth across Tennessee, and I thank the General Assembly for its partnership to promote future growth and opportunity for our state,” said Governor Bill Lee.

From August through October 2023, Tennesseans will not pay tax on food and food ingredients sold in grocery stores. On average, each Tennessee family will save over $100 in taxes. Additionally, local governments will be reimbursed by the state for any tax revenues lost during the period.

The legislation also provides support for families through an optional state paid family leave tax credit for companies that mirrors a similar federal credit. A company offering paid family leave may be eligible for a maximum 50% franchise and excise tax credit.

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