Bill Banning State Income Tax Filed

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NASHVILLE – State Senator Brian Kelsey (R-Germantown) and Representative Glen Casada (R-College Grove) filed a “No State Income Tax” constitutional amendment in the legislature today.

The amendment would clarify a prohibition in the Tennessee Constitution against an income tax and a payroll tax. The bipartisan resolutions, Senate Joint Resolution 18 and House Joint Resolution 10, were sponsored by a total of 71 legislators.

“If this amendment passes, Tennessee will never face an income tax battle again,” said Senator Kelsey. “Not having a state income tax has already brought jobs to Tennessee, and clarifying this prohibition will help Tennessee become the number one state in the Southeast for high quality jobs.”

Kelsey won passage of the resolution by a vote of 25-7 last year in the Senate, but the resolution stalled in a House Subcommittee during the waning days of the 2010 legislative session. Casada said he is very hopeful that the bill will be approved by the House of Representatives this session.

“In these tough economic times, Tennesseans need jobs and don’t need to be worrying about having to pay a state income tax,” said Representative Casada. “It’s time to let the people vote on the issue. This will show companies that hope to move to Tennessee that we are serious about never imposing an income tax.”

A state income tax was proposed from 1999-2002 and received 45 of the 50 votes necessary for passage in the House of Representatives in 2002. Last January, eight state lawmakers filed legislation to implement a state income tax. Lawmakers have several more weeks to file bills to be considered in the 2011 session.

The resolution specifies that the legislature as well as Tennessee counties and cities shall be prohibited from passing either an income tax or a payroll tax, which is a tax on employers that is measured by the wages they pay their workers. A payroll tax has been proposed as a way around an income tax, and a 2.5 percent payroll tax was proposed in recent years by elected officials in Shelby County.

Kelsey said there have been three cases before the Tennessee Supreme Court that have declared an income tax to be unconstitutional. The most recent case was decided in 1964, and it has never been overturned. However, in 1999 the State Attorney General issued an opinion saying an income tax was constitutional. There is concern that a new State Supreme Court might agree with the Attorney General opinion.

Other Senate sponsors of the resolution include Lt. Governor Ron Ramsey (R-Blountville), Senator Andy Berke (D-Chattanooga), Senator Mae Beavers (R-Mt. Juliet), Senator Randy McNally (R-Oak Ridge), Senator Mark Norris (R-Collierville), Senator Eric Stewart (D-Winchester), Senator Dolores Gresham (R-Somerville), Senator Jim Summerville (R-Dickson), Senator Stacey Campfield (R-Knoxville), Senator Jim Tracy (R-Shelbyville), Senator Ferrell Haile (R-Gallatin), Senator Rusty Crowe (R-Johnson City), Senator Mike Faulk (R-Church Hill), Senator Steve Southerland (R-Morristown), Senator Bill Ketron (R-Murfreesboro), Senator Ken Yager (R-Harriman), Senator Bo Watson (R-Hixson), Senator Jack Johnson (R-Franklin) and Senator Mike Bell (R-Riceville).

Other House sponsors of the resolution include Speaker Beth Harwell (R-Nashville), Rep. Steve McDaniel (R-Parker’s Crossroads), Rep. Kevin Brooks (R-Cleveland), Rep. David Alexander (R-Winchester), Rep. Mark White (R-Memphis), Rep. Barret Rich (R-Somerville), Rep. Gerald McCormick (R-Chattanooga), Rep. Curtis Halford (R-Dyer), Rep. Don Miller (R-Morristown), Rep. Dennis Powers (R-Jacksboro), Rep. Scotty Campbell (R-Mountain City), Rep. Jimmy Eldridge (R-Jackson), Rep. Rick Womick (R-Murfreesboro), Rep. Tim Wirgau (R-Buchanan), Rep. Joey Hensley (R-Hohenwald), Rep. Sheila Butt (R-Columbia), Rep. Steve Hall (R-Knoxville), Rep. Bill Sanderson (R-Kenton), Rep. Andy Holt (R-Dresden), Rep. Terri Lynn Weaver (R-Lancaster), Rep. Eddie Bass (D-Prospect), Rep. Vance Dennis (R-Savannah), Rep. John Forgety (R-Athens), Rep. Ryan Haynes (R-Knoxville), Rep. Frank Nicely (R-Strawberry Plains), Rep. Joshua Evans (R-Greenbrier), Rep. Jimmy Matlock (R-Lenoir City), Rep. Jim Cobb (R-Spring City), Rep. John D. Ragan (R-Oak Ridge), Rep. Phillip Johnson (R-Pegram), Rep. Pat Marsh (R-Shelbyville), Rep. Charles Sargent (R-Franklin), Rep. Julia Hurley (R-Lenoir City), Rep. Tony Shipley (R-Kingsport), Rep. Richard Floyd (R-Chattanooga), Rep. Cameron Sexton (R-Crossville), Rep. Ryan Williams (R-Cookeville), Rep. Jeremy Faison (R-Cosby), Rep. Debra Maggart (R-Hendersonville), Rep. Mike Sparks (R-Smyrna), Rep. Ron Lollar (R-Bartlett), Rep. Jim Coley (R-Bartlett), Rep. Jim Gotto (R-Hermitage), Rep. Matthew Hill (R-Johnson City), Rep. Eric Watson (R-Cleveland), Rep. Joe Carr (R-Lascassas), Rep. Mark Pody (R-Lebanon), Rep. Linda Elam (R-Mt. Juliet), Rep. Vince Dean (R-East Ridge), and Rep. Mike Harrison (R-Rogersville)
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