The House Finance Subcommittee refused to pass a Democrat-sponsored grocery tax cuts bill on Wednesday, but did not kill it.
The panel has added funding mechanisms House Bill 2sponsored by Nashville Democrat Aftyn Behn, and shipped it to what is known as “Summer Research.”
“The tone has changed to this issue because it became a campaign issue last year,” Behn says.
Behn’s goal is to build a “consensus and story” statewide, continue to push forward the measures during the 207th Campaign, and bring them back in 2027.
Meanwhile, Knoxville Republican Rep. Elaine Davis said Wednesday that she is ready to move the means through House committees over the next two weeks.
The biggest difference between the two is that Behn’s bill calls for replacing $600 million in lost state revenue by closing the “loophole” in the state’s minimum corporate tax.
The Department of Income reported last year that 60% of businesses paid less than $100 in excise tax, while 21% of businesses with federal tax incomes above $1 billion have paid nothing in excise tax. Sen. Charlen Oliver of Nashville called for a report.
Democrat Brian Goldberg, who faced Davis at the 2024 house contest, put up an ad to end the state’s food tax.
Davis made her proposal late last year, and recently updated her push with Hixon Republican Sen. Bo Watson having the Senate version. House majority leader William Lambers co-hosted the bill.
It does not include a way to replace lost state revenues and could reach the $843 million mark.
Watson told the Tennessee observation deck that legislature should come up with spending cuts to pay for grocery tax cuts.
Davis admits that her bill could lead to significant revenue cuts. It is estimated at $800 million, but it describes it as a “true tax cut” because it does not raise taxes elsewhere. This measure only affects the state’s sales tax percentage and is not local revenue.
Davis added: “We don’t cut revenue, because we’re going to use those families, the dollars we use to buy other products at the grocery store, or use them to bring the family to dinner.”
Apart from eliminating national shares, Davis said other options include breaks of basic items such as bread, milk, eggs, fruits and vegetables, and then may be staged in small cuts.
Behn is skeptical of the Republican proposal, saying Congress has no way of paying it as the state “broken” after lawmakers enacted a massive business tax credit in 2024.
“If they ask for $600 million from (the Children’s Services Department) or Tenncare, I would like them to explain it on the floor of their home,” Behn said.
Republicans say they are opposed to her bill because they can help businesses cut jobs. But Behn said the state could pay her proposal by enforcing tax laws “as written.”
Her proposals have been enacted in 20 other states, including Texas and Idaho.
Ben also said President Donald Trump is encouraging food tax cuts, adding that he is happy to support the “Trump Lambers” grocery tax credit.
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