South Tucson's elected leaders have voted to remove the city's grocery tax, a decision they say aims both to ease everyday expenses for residents and to help attract a new supermarket to the city. The council approved the change in April, and the tax abolition is scheduled to take effect on July 1. The move eliminates one of two revenue sources for the municipality at a moment when the city faces a growing budget deficit.
For South Tucson officials, the timing of the tax cut is tied directly to the closure of the city's only full-service supermarket. The Food City location that served residents shut its doors in October 2025, leaving a gap in neighborhood access to groceries. City leaders framed the elimination of the grocery tax as a policy intended to make the local market more appealing to grocers weighing whether to invest in a new store within city limits.
The grocery tax that the council voted to remove had been part of South Tucson's local revenue mix. With one of the two primary municipal levies now gone, city budgeting will proceed without that stream of revenue beginning in July. Officials acknowledge the city continues to operate with a widening budget shortfall, a reality that underscores the tradeoffs inherent in the decision to reduce a revenue source while pursuing economic development objectives.
Council members described the action as a twofold effort: to lower the cost of food for residents, particularly those with limited resources, and to send a signal to prospective supermarket operators that doing business in South Tucson will be less costly for consumers. The policy change is intended as an inducement designed to address both household affordability and broader retail attraction, though no new supermarket has yet been announced to replace the closed Food City.
The closure of Food City in October 2025 left South Tucson without its only supermarket. That vacancy has been a focal point for city leadership and residents who rely on close-by access to groceries. By eliminating the grocery tax, leaders have prioritized an economic development strategy that ties a municipal tax policy directly to efforts to restore full-service grocery retail within the city's boundaries.
Municipal finances now face a clear shift. With the grocery tax abolished, one of two revenue channels used by the city will no longer contribute to coffers. The council's decision comes despite a documented, growing budget deficit, which means the city will need to account for the lost revenue in upcoming budget cycles. At the same time, leaders argue that bringing a supermarket back could improve local access to food and stimulate other economic activity, effects that could, over time, influence the city's fiscal picture in different ways.
The effective date of the tax change is set for July 1, following the April vote by the city council. City officials have emphasized the need to move relatively quickly to implement the policy so that potential grocery operators see the fiscal environment that would await them if they chose to open in South Tucson. For now, however, the city remains without a full-service supermarket since the Food City closure late last year.
The council's decision to cut the grocery tax marks a clear policy choice at the intersection of municipal finance and retail attraction. Leaders presented the step as a measure to reduce costs for low-income residents and to create a more favorable business climate for grocers that might replace the closed store. The tax change will take effect July 1, and it removes one of the two revenue sources South Tucson had been relying on as the city contends with a growing budget deficit.
The former Food City supermarket in South Tucson, shown after its October 2025 closure; city leaders are cutting the grocery tax to try to attract a new supermarket.