“No State Income Tax” Amendment Sails Through Senate Finance Committee

Tuesday, February 5, 2013

The “No State Income Tax” constitutional amendment passed the Senate Finance Committee Tuesday by a vote of 9-1. 

The resolution, Senate Joint Resolution 1, is sponsored by Senator Brian Kelsey (R-Germantown) and would clarify a prohibition in the Tennessee Constitution against an income tax and a payroll tax.  The resolution was approved in the Senate last year by a vote of 26-4 and in the House by a vote of 73-17-3.

“I am very pleased with today’s vote in the Senate Finance Committee,” said Senator Kelsey. “Forever barring a state income tax in Tennessee sends a clear message to prospective businesses that we are serious about creating and retaining high quality jobs.”
 
Following Tuesday’s committee vote, the resolution must still be approved by a two-thirds vote in both chambers. Tennesseans will have the final say on the matter in November, 2014 when the amendment is put on the statewide ballot.
 
The resolution specifies that the state legislature as well as Tennessee cities and counties 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 in recent years by elected officials in Shelby County as a way around an income tax.  The Hall income tax on interest income and dividends remains intact.

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