Effort to cut food tax with levy on sodas stalls
NASHVILLE, TN. (AP) - A House panel has parked a bill to exchange a reduction in Tennessee's sales tax on groceries with an increase in the tax on sugary drinks.
The House Finance Subcommittee placed the measure sponsored by Democratic Rep. Mike Steward of Nashville among bills to be considered after the rest of the state's budget plan has been worked out, meaning it's unlikely to pass this year.
The projected $92 million the state would collect through a 1-cent increase on each ounce of sweetened drinks like Coke or Pepsi would offset the lost revenue from lowering the tax on groceries by 1%age point to 4.5%.
But local governments would lose about $3 million in state-shared taxes by the change, causing the panel to halt the bill's progress.
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