HENDERSONVILLE, Tenn. (WTVF) — In the coming weeks, Hendersonville's Board of Aldermen will decide if their local grocery sales tax will be lowered by half a cent. It's a move that hasn't been possible, until a recent state law changed.
Hendersonville's Mayor Jamie Clary first pitched the idea to his local state lawmakers about a year ago.
"We want to be able to give people who shop in Hendersonville the opportunity to pay less in sales tax on groceries than they do on everything else," said Clary. "That’s why we’re the first ones. We were ready for it, we were promoting it, we were advocating for it."
Clary thought it might take years to pass. Instead, it got immediate, bipartisan support in the Tennessee General Assembly.
"We didn’t think we’d be in this situation so quickly," he said.
Under the new law, communities can vote to lower their portion of the grocery sales tax. The state's portion of the grocery sales tax would not be effected. The current proposal in front of the Hendersonville Board of Aldermen would lower their local rate by half a cent — from 2.75% to 2.25%.
Of course, the move comes at a cost.
"This will have an impact on our revenue," said Clary. "Once this goes into effect, it will probably cost us about $800,000 dollars in revenue that we will be giving up."
Mayor Clary says the city can handle the drop in revenue, partially, because Hendersonville voters recently approved a sales tax hike. To be clear, if the grocery tax reduction passes, the hike on all other items would stay in place.
"We’re hoping to basically bring it back to neutral so people don’t feel the impact," he said.
Clary says they also built this year's fiscal budget knowing this reduction could be coming.
"We considered that this was a possibility, and now it looks like a real possibility," said Clary.
While Hendersonville is poised to be the first to take advantage of the law, Clary hopes they won't be the last.
"I don’t know if other cities are going to do it, but it’s a possibility for other cities if they want to now," he said.
The Board of Aldermen will vote Tuesday night. If it passes on the first reading, it will also have to pass on the second reading to become law.
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