Amends TCA Title 67, Chapter 6, Part 7.

Present law authorizes any county, by resolution of its county legislative body, or any incorporated city or town, by ordinance of its governing body, to levy a tax on the same privileges subject to sales and use taxes as those taxes may be amended, that are exercised within such county, city or town, to be levied and collected in the same manner and on all such privileges, but not to exceed 2.75 percent. However, the tax levied must apply only to the first $1,600 on the sale or use of any single article of personal property. This bill adds to the present law by authorizing a county, by resolution of its county legislative body, or an incorporated city or town, by ordinance of its governing body, to do the following: (1) Levy a tax on the retail sale of food and food ingredients within the county, city, or town at a rate less than the rate levied pursuant to the present law above; or (2) Exempt from the tax levied pursuant to the present law above the retail sale of food and food ingredients within the county, city, or town. This bill clarifies that the present law is subject to the provisions of this bill. TAX SUBJECT TO REFERENDUM This bill provides that nothing contained in the Local Option Revenue Act permits the levying of a reduced tax rate or an exemption pursuant to this bill, without ratification in the manner provided in existing law relevant to referendums, regardless of the nature of any previous call and regardless of future action of the general assembly regarding the levy of the tax authorized by the Local Option Revenue Act. ON APRIL 17, 2024, THE SENATE SUBSTITUTED HOUSE BILL 2641 FOR SENATE BILL 2520, ADOPTED AMENDMENT #1, AND PASSED HOUSE BILL 2641, AS AMENDED. AMENDMENT #1 rewrites the bill as follows: (1) In the context of tax authorized under the Local Option Revenue Act ("act"), establishes that "city tax rate" means, with regard to a city or town that is located within a county that has not adopted the maximum rate of 2.75 percent as set forth in the act, a rate adopted by the city or town that is equal to the difference between the county rate and the maximum rate as authorized by the act; (2) Authorizes a city or town that has adopted a city tax rate to do as follows: (A) Levy a tax on the retail sale of food and food ingredients within the jurisdiction of the city or town at a rate lower than the city tax rate levied for other privileges, goods, and services; or (B) Exempt from the city tax rate the retail sale of food and food ingredients within the city or town; (3) Requires the incorporated city or town to furnish a certified copy of the adopted ordinance authorized in (2) to the department of revenue ("department"). The reduced tax rate or exemption becomes effective on the first calendar day of the month occurring at least 60 days after the department receives the certified copy. The reduced tax rate or exemption applies only to tax periods beginning on or after October 1, 2024; (4) Authorizes any county, by resolution of its county legislative body, or, subject to (1)-(3), above, any incorporated city or town, by ordinance of its governing body, to levy a tax on the same privileges subject to the act as the act may be amended, that are exercised within such county, city or town, to be levied and collected in the same manner and on all such privileges, but not to exceed 2.75 percent; however, the tax levied must apply only to the first $1,600 on the sale or use of any single article of personal property; and (5) Establishes that the levying of a reduced tax rate or an exemption pursuant to (2), above, is not subject to the approval of the voters as required in the act, relative to referendums. ON APRIL 18, 2024, THE HOUSE NON-CONCURRED IN SENATE AMENDMENT #1.