Lower Taxes On Groceries Takes Affect Friday.

Could the reduction of an already low tax rate on groceries make a consumer drive into another state to save money?

A local grocery store owner says yes, and he's had the proof for years.

Tennessee shoppers will have the chance to make some comparisons down the aisles beginning Friday, when the first of a three-step, accelerated drop in the tax on consumable food products drops to 2.5 percent in Virginia.

ThriftWay Market President Terry Frazier said Monday the lure of a lower grocery tax has always made up a good percentage of the overall yearly sales at his store, which opened its doors in the mid-1960s.

"We have people come from as far away as Church Hill and Rogersville and Bloomingdale to shop here, and they tell me the main reason is that groceries are cheaper,'' said Frazier. "A loyalty base adds into that, but I think the drop in the tax will give all of the stores over here (in Scott County) a little bit of a boost once the word gets around that the tax is being reduced.

"I think the stores closer to the state line will reap the benefits right away. Even with a local grocery tax, the rate will still be 3.5 percent, and that is still lower than any of the Tennessee localities. If a 10- to 15-minute drive is going to save you money, I think people will do it.''

Many of Scott County's neighbors in Tennessee charge an additional local 2.75 percent tax along with a state grocery tax of 6 percent.

Information released last week by the Virginia Department of Taxation states that with the change in the law lowering the tax on July 1, a family of four with an annual income of $60,000 stands to save $83 a year if their weekly grocery bill averages just over $100.

Frazier also noted that an upswing in food sold for home consumption could offset some declining sales in cigarettes brought on by an increase in the tax per pack and carton instituted by Virginia lawmakers two years ago.

The state went from having one of the lowest cigarette taxes, 2.5 cents per pack, to the current 20 cent-per-pack price. That will increase to 30 cents on Friday.

Not really sure if that sounds as good as it's made to sound. Esp. when you read this part. And if you smoke. Well it really puts the hurt on you.

</font><blockquote><font class="small">In reply to:</font><hr />
Information released last week by the Virginia Department of Taxation states that with the change in the law lowering the tax on July 1, a family of four with an annual income of $60,000 stands to save $83 a year if their weekly grocery bill averages just over $100.
Frazier also noted that an upswing in food sold for home consumption could offset some declining sales in cigarettes brought on by an increase in the tax per pack and carton instituted by Virginia lawmakers two years ago.
The state went from having one of the lowest cigarette taxes, 2.5 cents per pack, to the current 20 cent-per-pack price. That will increase to 30 cents on Friday.


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[starbuck]

I use to drive to Pikeville to Walmart supercenter to grocery shop about once a month. they have NO tax on groceries in KY and is the same as driving to Kingsport

[PVVikeFan]

Because of oil prices groceries will continue to rise. I don't think the lower tax will even be noticed.

[SunTzu]

You are right on the money . Unfortunatly all consumer commodities will see a price increase due to rising fuel prices(transportation costs). Clothes , food , appliances etc. Anything that is trucked from one location to another will increase because companies will raise their prices to offset fuel costs and it wil be passed on to us as we are the end consumer . A major domino effect set in motion.