Current:Home > NewsTennessee Senate advances nearly $2 billion business tax cut, refund to prevent lawsuit-InfoLens
Tennessee Senate advances nearly $2 billion business tax cut, refund to prevent lawsuit
View Date:2024-12-23 15:08:08
NASHVILLE, Tenn. (AP) — The Tennessee Senate on Thursday approved a nearly $2 billion tax and refund for businesses, a proposal designed to prevent threats of a potential lawsuit even as critics warned the so-called solution was rushed without being properly vetted and shrouded in mystery.
Starting last fall, Republican legislative leaders say a law firm representing a large group of businesses contacted the state to question the legality of Tennessee’s 90-year-old franchise tax and demanded a refund. In response, Gov. Bill Lee initially proposed offering businesses $1.2 billion in refunds and then an ongoing $410 million in tax breaks.
That amount has since been tweaked to $1.56 billion in refunds and $393 million in tax breaks, totaling $1.95 billion.
“This bill will put this issue behind us and address it in a responsible way,” said Republican Sen. Ken Yager, adding that doing so could make the state more competitive in attracting businesses to move to Tennessee.
At issue are concerns that the state’s franchise tax violates a U.S. Constitution’s Commerce Clause provision, which bans states from passing laws that burden interstate commerce. Furthermore, in 2015, the U.S. Supreme Court struck down Maryland’s tax that the justices ruled had the effect of double-taxing income residents earn in other states.
Maryland allowed its residents to deduct income taxes paid to other states from their Maryland state tax, but it did not apply that deduction to a local “piggy back” tax collected for counties and some city governments — something that the high court decided was illegal.
“Nobody likes this solution. The governor doesn’t like this solution. Revenue doesn’t like this solution. The attorney general doesn’t like this solution, but the reality is this is the best solution,” said Sen. Bo Watson, the Republican chair of the Senate’s Finance, Ways and Means Committee, as he raised in voice and admonished the Democrats criticizing the plan.
Yet details about what specific businesses raised the original legal concerns have remained hidden. State leaders have refused to disclose what businesses have requested a refund. The original number of the group of businesses who reached out to lawmakers last fall was originally disclosed at around 80, but on Thursday, Yager mentioned that the law firm represented “hundreds” of individuals.
Meanwhile, it’s unclear what other possible options were considered. There have also been grumblings that Lee’s personal business, the Franklin-based Lee Co., could benefit from this legislation.
On Thursday, Democratic lawmakers pointed out the unusualness of the Republican-dominant Statehouse to move quickly to avoid a lawsuit when GOP members regularly advance legislation knowing it could face potential litigation.
“We are having this discussion as if we have to and we’re under the gun,” said Sen. Jeff Yarbro, a Democrat. “I don’t think that’s appropriate.”
The legislation passed 25-6 on Thursday, with only Democrats voting against. The bill must still clear the House chamber.
veryGood! (348)
Related
- Medical King recalls 222,000 adult bed assistance rails after one reported death
- NFL power rankings: Bills, Cowboys among teams taking big hits this offseason
- U.S. companies announced over 90,000 job cuts in March — the highest number since January 2023
- Michigan Gov. Gretchen Whitmer announces book detailing her rapid rise in Democratic politics
- Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, 4G
- British Museum faces probe over handling of tabots, sacred Ethiopian artifacts held 150 years out of view
- Gay rights activists call for more international pressure on Uganda over anti-gay law
- Michael Douglas on Franklin, and his own inspiring third act
- Avril Lavigne’s Ex Mod Sun Is Dating Love Is Blind Star Brittany Wisniewski, Debuts Romance With a Kiss
- Rudy Giuliani can remain in Florida condo, despite judge’s concern with his spending habits
Ranking
- Caitlin Clark has one goal for her LPGA pro-am debut: Don't hit anyone with a golf ball
- Man's body believed to have gone over Niagara Falls identified more than 30 years later
- Brown rats used shipping superhighways to conquer North American cities, study says
- NC State's 1983 national champion Wolfpack men remain a team, 41 years later
- OneTaste Founder Nicole Daedone Speaks Out on Sex Cult Allegations Against Orgasmic Meditation Company
- This Los Angeles heist sounds like it came from a thriller novel. Thieves stole $30 million in cash
- Messi, Inter Miami confront Monterrey after 2-1 loss and yellow card barrage, report says
- Family of student charged in beating death of Arizona teen Preston Lord accused of 'cover-up'
Recommendation
-
What do nails have to say about your health? Experts answer your FAQs.
-
The US has more 'million-dollar cities' than ever, Zillow says. Here's what that means.
-
Watch California thief disguised as garbage bag steal package in doorbell cam footage
-
Yankees return home after scorching 6-1 start: 'We're dangerous'
-
Contained, extinguished and mopping up: Here’s what some common wildfire terms mean
-
Biden condemns unacceptable Israeli strike on World Central Kitchen aid convoy in call with Netanyahu
-
Biden is touring collapsed Baltimore bridge where recovery effort has political overtones
-
Cole Palmer’s hat trick sparks stunning 4-3 comeback for Chelsea against Man United