Image Credit: tn.gov
The Center Square [By Jon Styf] –
Tennessee’s Legislature passed a bill promoted by Gov. Bill Lee on what was budgeted to be $412 million in tax cuts as the session completed late last week.
The largest factor in the bill was $272.8 million in a three-month food and food ingredients tax holiday from August through October across the state, a proposal that holds locals harmless by sending other state tax funds their way to cover the local portion of the food tax.
The bill will next head to the desk of Gov. Bill Lee, who proposed the cuts.
House Bill 323 also includes changing the state franchise and excise taxes to single sales factor taxes like 32 other states. Those taxes are based only on a business’s sales within the state of Tennessee. It will be phased in over three years.
Sen. Jack Johnson, R-Franklin said the bill would boost the state’s economic competitiveness, helps small businesses and the food sales tax holiday will help Tennessee families.
It also creates a $50,000 net earnings reduction ($37.8 million cost) from excise taxes while exempting $500,000 of property from franchise taxes ($20.3 million cost) and increases the filing threshold for business tax from $10,000 to $100,000 ($7.9 million cost).
A family leave tax credit will be created for businesses that gives employees from two to 12 weeks of paid leave, providing at least 50% of normal wages over that period. If a business provides 50% of wages, it receives a 12.5% credit for those wages and it maxes out at a 25% credit if full wages are paid. The program is not mandatory for businesses.
That tax credit will be a two-year pilot program, Johnson explained.
About the Author: Jon Styf, The Center Square Staff Reporter – Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies. Follow Jon on Twitter @JonStyf.
