O'Connell administration to look at grocery tax cut
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Nashville Mayor Freddie O'Connell's administration will examine lowering the city's sales tax on groceries.
Why it matters: Cost of living, especially groceries, continues to be an issue for working families.
- With his transportation funding plan in place, O'Connell said last week the time is right to look at slashing the grocery tax.
The big picture: Tennessee is one of 13 states that charge sales tax on groceries.
- State Rep. Aftyn Behn, a Nashville Democrat, pushed legislation this year to cut the state's portion of the sales tax on groceries.
- Behn's measure stalled, but Republicans, led by Rep. William Lamberth, passed a bill giving local governments the power to reduce their portion, but not the state's.
State of play: The state charges a 4% tax on groceries. Nashville currently charges 2.25%.
- Nashville's sales tax will rise to 2.75% when the new half-cent sales tax increase takes effect Feb. 1, bringing the total tax rate shoppers will pay on their grocery bills to 6.75%.
- Under the state's new legislation, Nashville leaders could reduce how much of their 2.75% tax they charge for groceries.
Between the lines: Metro is entering a property reappraisal season, which takes place every four years.
- The city typically takes a broader view of its revenue and expenses during reappraisal years.
- Rising property values from the previous four years can add tax revenue to Metro coffers.
- "We'll want to evaluate things knowing that this is an appraisal year. But that is something we'll probably at least want to get a cost estimate on."
What he's saying: Lamberth tells Axios he thinks it's "wonderful" O'Connell's administration could look at reducing the local grocery tax. Hendersonville became the first city to take advantage of the new law and reduce its grocery tax earlier this year.
- "Tennesseans enjoy one of the lowest tax burdens in the nation," he says. "This is another way we are giving citizens the opportunity to pay less for essentials like groceries so they can keep more of their hard-earned dollars."
What we're watching: Behn told Axios earlier this year she wants to turn pocketbook issues like the grocery tax into a statewide organizing effort.
- Behn has already filed legislation for next legislative session to cut the grocery tax statewide.
- "With the recent transit approval, we're well-positioned to provide meaningful tax relief for families," Behn tells Axios. "I look forward to seeing our state leadership demonstrate a similar commitment in the upcoming legislative session."
Editor's note: This story was updated with additional context about reappraisal years.