Taxes, Sales - As introduced, exempts from the state sales and use tax the retail sale of food and food ingredients. - Amends TCA Title 57, Chapter 3 and Title 67.

SB 2314 exempts the retail sale of food and food ingredients from Tennessee's state sales tax (Section 1), directly affecting grocery stores, restaurants, and food retailers. It removes a requirement that restaurants must derive at least 20% of their sales from taxed food (Sections 7-8), simplifying sales tax compliance for these businesses. The bill also creates a new tax provision for food under a different section (Section 2) and eliminates a funding mechanism that previously earmarked 0.5% of sales tax revenue for K-12 education (Section 3). The changes take effect July 1, 2026.