State Rep. Cameron Sexton and State Sen. Jim Tracy have introduced legislation to reduce the excise tax on Tennessee business.
The “Investing in Tennessee’s Existing Business Act”, HB64/SB245, seeks to reduce Tennessee’s excise tax from 6.5 percent to 6.25 percent.
“Over the last decade, Tennessee has given over a billion dollars in incentives to new companies looking to relocate to our great state. While we need to continue to actively recruit new businesses, we must not forget about our existing businesses,” said Sexton.
In the last fiscal year, over 41,000 businesses had to pay Tennessee’s excise tax with an average estimated yearly tax payment of $29,000 per business.
“Too many times economic development efforts are focused on recruiting new businesses and not focused on keeping and growing our current businesses. I feel like this is a great incentive and a way to reward the businesses that have helped Tennessee grow here at home,” said Tracy.
“Tennessee’s existing businesses are our key to continue long-term economic growth. Reducing their tax burden and allowing the businesses to make the decision on how, or when, to use the additional revenue ensures minimum government interference,” added Sexton.
Tennessee’s unemployment rate of 7.6 is the lowest since 2008. Tennessee was ranked as the fourth best business climate by the Wall Street Journal for 2012, behind such states as Texas and Florida.
“Our economy and business climate are shifting into high gear. We must continue to provide opportunities for existing businesses to grow, invest, and create jobs throughout Tennessee,” said Sexton.
Governors across America are working diligently to improve their state’s business tax structure environment to stand out from the other states. Nebraska and Louisiana have proposed to eliminate their state income tax so they can become more attractive in recruiting and retaining jobs.
“Tennessee does not have a personnel income tax, but unfortunately our excise tax is a corporate income tax. We can’t wait for other states to pass us before we act. We need to lead by example and establish a business tax structure that ultimately rewards existing businesses and invites new businesses to Tennessee without having to provide hundreds of million dollars in incentives,” said Tracy.