TN SB1367

Eliminates state sales tax on retail sales of food and food ingredients, with exceptions for certain categories that remain taxable under local option taxes

Removes the 0.5% education earmark provision that previously directed food sales tax revenue to K-12 education funding

Requires continued allocation to counties and municipalities of amounts equivalent to what they would have received from food sales tax, based on reported exempt food sales data

Updates liquor-by-the-drink license requirements to calculate the 20% food sales threshold based on total sales rather than taxable sales

Takes effect July 1, 2025