Food Tax to go up in Smokes?

Published in CSP Daily News

Tennessee bill would cut food tax in half, increase cigarettes' tax rate

KNOXVILLE, Tenn. -- Supporters of proposed legislation that would drop half of Tennessee's sales tax on food in exchange for an increase in cigarette taxes gathered Thursday in Knoxville and Nashville to push for the initiative's passage.

"Our cruel and unjust food tax makes it difficult for families to feed themselves," Nancy Stewart of the League of Women Voters said during a press conference at the Knoxville office of Tennesseans for Fair Taxation (TFT), according to a report in the Knoxville News Sentinel. Stewart and other speakers rammed [image-nocss] home the effects of Tennessee's sales taxes on the poor by pointing out that Tennessee's average food tax is 8.4% while most states don't tax food at all.

Tennessee also has the fourth-lowest cigarette taxes in the nation, they said, and the proposed bills in the state Senate and House of Representatives would cut the state tax on groceries by half and make up the revenue shortfall by adding an additional tax on cigarettes to the tune of about 43 cents a pack.

Julie Henderson, a community organizer for the nonprofit agency Solutions Inc., said the legislation would help curb health-care costs by discouraging smoking while also "providing relief for families who are struggling to put nutritious meals on their tables."

In Nashville, a similar event was held outside the Legislative Plaza with two legislators and 10 TFT supporters on hand. Reps. Joey Hensley (R) and Gary Odom (D) said they think the proposal has a reasonable chance of passage.

On the other hand, House Speaker Jimmy Naifeh said he had doubts that the proposal was fiscally sound and could cause state budget problems. "I'm not convinced that we can make up (the loss of revenue from) the sales tax on food with a tobacco tax increase," Naifeh said in response to questions. "There's a gap there that I don't think we can recover from."

The tax swap would cut the state food tax from 6% to 3%, but local government add-ons wouldn't be affected, leaving a maximum local food tax of 5.75%, according to figures released by the TFT group. The bills are bipartisan, with sponsors including Knoxville Reps. Joe Armstrong and Harry Tindell, both Democrats, as well as state Sen. Tim Burchett, a Knoxville Republican.