Taxes, Sales - As introduced, exempts from the state sales and use tax the retail sale of food and food ingredients. - Amends TCA Title 57, Chapter 3 and Title 67.

SB 1367 exempts the retail sale of food and food ingredients from Tennessee's state sales tax, meaning consumers will no longer pay sales tax on most grocery purchases. The bill adjusts tax revenue distribution to ensure counties and municipalities receive equivalent funding that would have been generated from the food tax, while removing a prior requirement to allocate half of the food tax revenue for K-12 education. Key provisions include revising tax code sections to eliminate the food tax and update business licensing requirements tied to food sales. The exemption and related changes will take effect on July 1, 2025.