Gov. Bill Lee proposes two-week sales tax break on dining out, groceries in budget amendment

State of Tennessee press release, Tuesday, April 13, 2021,  NASHVILLE, Tenn. - Today, Tennessee Governor Bill Lee announced his amendment to the proposed Fiscal Year 2021-2022 budget.

The amendment includes $580 million in available funds as a result of fiscal prudence. These funds will be invested in strategic long-term projects that focus on a return to pre-pandemic priorities and deliver critical services while not growing government. The budget amendment also includes nearly $100 million for a two-week sales tax holiday on all grocery sales, purchases at restaurants, and all prepared food. 

“This proposal supports Tennesseans by strategically investing in long-term initiatives that will move our state forward,” said Gov. Lee. “I’m especially proud to provide tax cuts to get money back to Tennesseans to encourage them to frequent industries that have been disproportionately and negatively impacted this year.” 

 

This amendment reflects the Governor’s priorities and includes record investments in broadband, economic development, safety and law enforcement, increasing reserves, and education. 

“Due to Tennessee’s strong financial leadership, Tennessee has been ranked number one in fiscal stability by US World News & Report in both 2019 and 2020,” said Commissioner of Finance and Administration Butch Eley.

  

“Our prudent and cautious approach has established Tennessee as a leader in fiscal conservatism, and we thank the General Assembly for their partnership in these efforts.” 

Notable investments in the FY 21-22 budget amendment include:

 

Tax Cuts 

• $25M for a two-week sales tax holiday for groceries 
• $75M for a two-week sales tax holiday for restaurants and all prepared food 
• $16M to reduce the professional privilege tax by 25 percent 

K-12 Education and Mental Health 

• $250M trust fund to assist K-12 families who are facing significant mental health issues in the wake of COVID-19 
• $18.5M to transportation to students for summer learning 
• $2M to provide an additional 4 high quality, grade aligned books and resources over the summer for the 88,000 rising first graders in Tennessee 

Higher Education 

• $79M to eliminate current TCAT waitlists statewide, currently at 11,400 students 
• $25M to Tennessee Promise to permit increases in the Hope Scholarship 
• $4M to increase Agriculture Extension Agents at University of Tennessee and Tennessee State University 

Rural & Agriculture 

• $50K to support the state fair (in addition to the $250,000 recurring in originally proposed budget for total of $300K and $5M non-recurring) 
• $3M to provide additional funding for rural projects as part of the Rural Economic Opportunity Fund (in addition to $21M in originally proposed budget for total of $24M) 

Safety 

• $500K to provide gun safety programming for children 
• $17M to replace radios for state troopers 
• $18M to improve the statewide disaster communications system 
• $680K to add 4 new Homeland Security Agents 

Economic Development 

• $5M to provide grants to restore and preserve historic downtowns across the state 
• $3M to increase employment in Tennessee through the Small Business Innovation program

Transportation 

• $3M recurring and an additional $10M nonrecurring to provide additional direct funding to airports across Tennessee through the Transportation Equity Fund (total $50M investment in air infrastructure) 

To view the full budget amendment, click here.

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