Image Credit: Mayor Indya Kincannon / Facebook
The Tennessee Conservative [By Olivia Lupia] –
The Knoxville City Council will take a final vote this week to decide whether to put a city sales tax increase in front of voters. But the increase could end up eliminating the city’s grocery sales tax exemption despite being a selling point in support of the tax.
Knoxville’s Democrat Mayor Indya Kincannon has proposed raising sales taxes within city limits by half a percent which would supposedly boost the city’s spending power by 10%. The money would theoretically allow the city to pay for deferred maintenance on public properties, complete infrastructure updates like paving roads and adding sidewalks, greenways, and parks, and support more affordable housing.
Kincannon’s pitch exempts groceries from the sales tax increase in an attempt to bring a money-saving component to the measure, but thanks to a 2024 Tennessee law that may not be possible. According to the state statute, cities can only exempt groceries from sales taxes if the city sale’s tax rate remains lower than the county’s.
Therefore, if Knox County decides to raise the county sales tax to match the city, which happened the last time Knoxville raised its taxes, the grocery sales tax exemption will disappear. If the city council approves the measure on June 24, Knox County has until August 3 to decide if it wants to adopt the city’s proposal for itself.
Even if the county opts not to adopt the city’s increase, they can adopt their own increase anytime and place it before Knox County voters for approval. This means that even if the grocery tax exemption remained in place for now, it could still disappear should the county opt to later adopt an increase, and city residents would have no say in the matter as only county residents would vote on the issue.
There are several incentives for Knox County to follow the city’s lead in the sales tax increase, especially as the move would generate millions of dollars for Knox County Schools (KCS). So long as the city and county tax rates are the same, both entities are legally required to give most of their revenue to KCS. If the county rate remains lower than the city’s, the city will get to keep all the extra revenue.
If the city council gives its approval, the measure will appear before Knoxville voters on their November 4 ballots and will take effect March 1, 2026.
About the Author: Olivia Lupia is a political refugee from Colorado who now calls Tennessee home. A proud follower of Christ, she views all political happenings through a Biblical lens and aims to utilize her knowledge and experience to educate and equip others. Olivia is an outspoken conservative who has run for local office, managed campaigns, and been highly involved with state & local GOPs, state legislatures, and other grassroots organizations and movements. Olivia can be reached at olivia@tennesseeconservativenews.com.
