According to Governor Bill Haslam, the reduction is designed to make government more efficient while reducing the cost to taxpayers.
The new sales tax rate on food items means that families buying $100 worth of groceries in a week will save about 25 cents or in a year as much as $13.
In his 2012-2013 Fiscal Year budget, Haslam included $21.3 million to fund the legislation, meaning the state is losing that amount by cutting the tax. The average saving per person amounts to $3.40 a year.
The reduced tax does not apply to prepared foods, such as a meal in a restaurant, candy, alcoholic beverages or tobacco.
Haslam says he hopes to have the tax reduced even more. He said hed like to see the food sales tax at 5 percent by 2014.