Nashville Grocery Tax Drop Begins Next Week

The local grocery tax in Davidson County will decrease by 0.5 percent on Nov. 1.

The reduction was proposed by Mayor Freddie O’Connell earlier this year and passed by the Metro Council in June. The change applies to the local portion of the grocery bill. Metro estimates the cut will remove roughly $9 million from the city’s annual revenue.

The political path to this cut has been marked by competing priorities. In 2024, voters approved a 0.5 percent sales tax increase to fund transit improvements under the Choose How You Move plan. This grocery tax reduction mirrors that percentage. State legislators recently rejected bills from Rep. Aftyn Behn and Sen. Charlane Oliver that would have ended the state grocery tax entirely. As a result, residents still pay a 1.75 percent local grocery tax plus a 4 percent state rate on groceries. Prepared food carries a 7 percent state tax.

Mayor O’Connell defended the loss of revenue as a necessary trade-off for immediate relief. He noted that the city has limited tools to fund public services. “It does amount to a reduction in our ability to capture revenue with a very limited set of tools to put revenue into public services and public resources,” O’Connell said Friday. He added that the cut provides broad-based economic relief starting this weekend.

Critics within the Metro Council argued the savings are modest compared to other cost-of-living pressures. Councilmember Quin Evans Segall stated in June that the cut reduces taxes on expensive items like wagyu steak without helping families struggling with rent. “When weighing $6 a month against investments that could actually lower someone's rent and childcare expenses, I decided we should target these large, structural items affecting our cost of living for those who need it most,” Segall wrote.

State Democratic gubernatorial candidate Jerri Green has also used the grocery tax as a campaign issue. She has told voters she plans to end the tax if elected next week. O’Connell expressed hope that the state will continue reducing or eliminating the tax entirely. “I'd love for them to continue doing that, to maybe even zero it out,” O’Connell said. He preferred the policy decision be made at the state level to avoid difficult local choices.

The Metro Council approved the reduction as part of the 2027 budget. The change takes effect Nov. 1. Families can expect an annual savings of approximately $72. The state tax rates on groceries and prepared foods remain in effect through the holiday season.