CORNWALL COUNCIL is part of a group of local authorities formally asking the government for new powers to tax large supermarkets.
A total of 20 local councils in England are backing the -called "Tesco tax" on big retailers, which could raise up to £400m a year if it was imposed on all big out-of-town retailers.
The councils want to gain the right to impose a levy on large supermarkets, retain the money raised, and use it to help small businesses and community centres.
Derby City Council has made the suggestion under the Sustainable Communities Act, which allows communities and councils to put forward ideas to government to solve local problems.
The extra business rates levy of up to 8.5% would affect any large retail outlet with a rateable value of more than £500,000.
A similar tax already operates in Northern Ireland and Scotland, but the government has said extra taxes on big supermarkets in England would hit the poorest families.
"We ruled out such a bid for higher taxes under the last round of the Sustainable Communities Act proposals," said the Department for Communities and Local Government (DCLG). "There are much better ways to support small shops."
Supporters of the move believe the supermarkets can afford it, saying it is just a fraction of the costs that they had to swallow when VAT was raised in 2011.
The government will have six months to formally respond. If agreed, the levy would apply not just to the 20 councils seeking change but to all local authorities in England. And if every one of them took it up, it could cost the big supermarkets alone an extra £190m in tax.