Now for some good news. Here in Tennessee, we are looking forward to an unprecedented three months of grocery shopping without having to pay sales tax on the food and food ingredients we buy.
In its 2023 session, the Tennessee General Assembly approved a three-month “grocery tax holiday” on food and food ingredients which begins at 12:01 a.m. on Tuesday, Aug. 1 and ends at 11:59 p.m. on Tuesday, Oct. 31.
This should be welcome news to all of us who have seen our grocery bills skyrocket with inflation, supply chain issues, labor, transportation costs and other factors.
According to the Bureau of Labor Statistics, food at home prices were up 5.8 percent in May compared to a year earlier. And that comes after U.S. consumers saw the largest annual increase – 11 percent — from 2021 to 2022.
The sales tax that will be waived for the three-month period is both the state tax and the local sales tax. Food and food ingredients are otherwise taxed at the 4% state sales tax rate plus the local rates which range from 2.25 to 2.75 percent.) So, the tax holiday means a grocery savings of 6.25 percent to 6.75 percent for most Tennessee families.
Every time I go to the grocery, I marvel (and sometimes rail) at the price increases on almost every category of foods in the stores.
So, this Tennessee tax holiday is a good start to help families curb grocery costs. And if you use some other grocery savings strategies along with the no tax during the three months, you really can rein in your grocery spending.
Tennessee Department of Revenue Commissioner David Gerregano calls the grocery tax holiday a “tax cut.”
And this is also a great time to take advantage of the price break to buy groceries for your favorite food pantries.
Here are a few tips for grocery savings:
• Download the grocery apps for stores where you shop and then “clip” coupons there. You should also join the free digital loyalty programs that most grocery stores offer for additional savings.
• Stockpile items that you use over and over. Make a list of a dozen or so things you regularly buy and know what the best price is on those things so you can stock up when they go on sale. I hate paying top dollar for food items like cereal, crackers, chips, cheese and other items that routinely go on sale.
• Buy in bulk. Lots of items like ground beef and chicken are cheaper per pound when you buy large packages. You can always divide the bulk food up when you get home and freeze it in meal-size portions.
• Store brands offer significant savings on staples like canned tomatoes, peanut butter, paper napkins or frozen vegetables, or most dairy products. Most are cheaper, plus some grocery stores like Publix and Aldi offer a money-back guarantee on their brands.
• Check dates on perishable items and choose the one with the latest expiration date to minimize food waste. Be aware that a “sell by” date is not the last date for an item to be safe to use.
• Go for the sale items. Check the flyer at the store or online to see what is on sale. In other words, if chicken is on sale, it is a good week to eat chicken. If you see super cheap eggs or cheese, grab it.
• Know where the clearance sections are at your stores. For example, Kroger often has marked down meats that offer good savings and a shelf in the produce department where they display marked down fruits and vegetables. (I just bought a bag of 8-10 limes for 99 cents and often see bell peppers. avocados, onions and squash in the clearance area.)
Always check your receipt to be sure the price you are paying is correct. It is easier to rectify it while still in the store than once you get home.
You can find examples of what is included in the grocery tax holiday at www.tn.gov.
A little history
In 2021, there was a week-long grocery tax holiday, and prepared food was also included.
Last year, there was a month-long grocery tax holiday. Prepared food was not included in that holiday, but the retail sales of food and food ingredients sold between Aug. 1, 2022, and Aug. 31, 2022, were exempted from sales tax.
This year, the three-month grocery holiday is part of a larger business reform and tax cut for Tennessee families and businesses, Tennessee Department of Revenue officials said. This year’s grocery holiday exempts the retail sale of food and food ingredients and does not include prepared foods.
For more information on the tax holiday, go to www.tn.gov/revenue
Mary Hance, who has four decades of journalism experience in the Nashville area, writes a weekly Ms. Cheap column. She also appears on Thursdays on “Talk of the Town” on NewsChannel 5. Reach her at [email protected] and follow her on Facebook at Facebook.com/mscheap.