TN SB2347

Eliminates the state sales tax on retail sales of food and food ingredients, effective July 1, 2026

Removes the existing 0.5% earmark from food sales tax revenue that was designated for K-12 education funding

Requires counties and municipalities to receive allocation amounts substantially equal to what they would have received from food sales tax before the exemption

Food and food ingredients remain subject to local option sales taxes under Part 7 of the tax code

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