Tenn. House passes tax cuts on groceries, estates - WMC Action News 5 - Memphis, Tennessee

Tenn. House passes tax cuts on groceries, estates

(WMC-TV) - The Tennessee House approved bills eliminating the inheritance tax and cut the sales tax on groceries.

A decrease in the Tennessee grocery tax, which is one of the highest food taxes in the country, is a part of Governor Bill Haslam's budget and has been on the table for weeks.

In a unanimous vote Thursday, the House passed the measure to officially cut the food tax from 5.5 to 5.25 percent.

Most Tennessee consumer said any tax cut helps.

"I'll see the savings a lot because I'm a big eater," said one shopper.

If you have a grocery bill of about $125, the savings would be about 32 cents with the 5.25 percent tax.  According to the most recent US Census, Tennessee has about 2.4 million households.  Multiplied by 32 cents, the state would save over $700,000.

Republicans hailed the estate tax cut as a way to keep retirees from moving out of state, while Democrats argued that the tax cut on groceries affects a far larger number of people.

The inheritance tax currently applies to estates worth more than $1 million, and was paid in 845 instances in the last budget year. The bill would bump that exemption up to $1.25 million next year and to $5 million by 2016.

Copyright 2012 WMC-TV. All rights reserved. The AP contributed to this report.

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