As families across Tennessee are struggling with inflation as food prices continue to rise, a tax break on food and food ingredients begins today and could give some much-needed relief.

The Tennessee Legislature has approved a three-month grocery tax holiday on food and food ingredients; it is set to begin at 12:01 a.m. on Tuesday, August 1, 2023, and end at 11:59 p.m. on Tuesday, October 31, 2023. The tax cut proposal that could save Tennesseans as much as $407 million and would be the largest tax cut in state history.

Food and Food Ingredients

Food and food ingredients are “liquid, concentrated, solid, frozen, dried, or dehydrated substances that are sold to be ingested or chewed by humans and are consumed for their taste or nutritional value. Food and food ingredients do not include alcoholic beverages, tobacco, candy, or dietary supplements.”

Per state law, “food and food ingredients” are defined as “liquid, concentrated, solid, frozen, dried or dehydrated substances that are sold to be ingested or chewed by humans and are consumed for their taste or nutritional value.”

Examples of food and food ingredients include:

• baby food
• baking items such as baking powder, baking soda, biscuit mix, cake mixes, cocoa powder, flavoring extracts, flour, sugar, sugar substitutes and other sweeteners, frostings, yeast,
• beverage powders (other than dietary supplements)
• bottled water (carbonated, flavored, sweetened or unsweetened)
• bouillon cubes
• bread
• butter, margarine and shortening
• cakes
• canned foods
• cereal
• chip dip
• chips (potato, corn, etc.)
• chocolate (unsweetened)
• coffee and teas (bags, leaves or bottled)
• condiments (e.g., ketchup, mustard, mayonnaise)
• cookies
• cooking oil
• dairy products, including cheese and yogurt
• eggs, fish and meats, including lunch meats
• food colorings
• frozen meals
• fruit (fresh or unsweetened dried) and fruit juices
• gelatin
• granola and breakfast bars containing flour
• gravies and sauces (mixes or extracts)
• herbs and spices, seasonings
• honey
• ice
• ice cream and sherbet
• jams and jellies
• marinated raw meats, meat extracts and meat tenderizers
• nuts
• olives
• pasta
• pastries, pies and pretzels
• peanut butter
• pickles
• popcorn
• popsicles
• poultry
• pumpkins
• raw eggs, fish and meats requiring cooking
• relishes
• salad dressing and mixes and salad oil
• soft drinks
• vegetables (fresh, frozen, dried, etc.) and vegetable juices
• vinegar

The definition also includes meal substitutes, as they can be identified by a nutrition facts box on the label, according to state officials. Things like unsweetened breakfast bars or those containing flour, unsweetened dried fruit snacks, drinks such as Ensure or Boost, pop tart and soup mixes are examples of meal substitutes.

Things that are not included in the sales tax suspension and still carry their 4% state sales tax rate plus any local sales tax rates include alcoholic beverages, tobacco, candy, dietary supplements, and prepared food.