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Senate Approves “No State Income Tax” Constitutional Amendment Resolution

Wednesday, March 09, 2011
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(NASHVILLE, TN), March 9, 2011 –  The Senate voted 28 to 5 this morning to approve the “No State Income Tax” amendment to the Tennessee constitution.  The bipartisan proposal, sponsored by State Senator Brian Kelsey (R-Germantown), would clarify that an income tax and a payroll tax are prohibited by the Tennessee Constitution.

“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.  Being able to tell prospective businesses that we will never have an income tax will bring even more jobs and help Tennessee become the number one state in the Southeast for high quality jobs.”

The proposal, Senate Joint Resolution 18, 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.  An effort to impose a local payroll tax was defeated by voters in the City of Memphis in 2004 but was proposed again in recent years by elected officials in Shelby County.

The most serious attempt to pass a statewide income tax was in 2002, when the proposal received 45 of the 50 votes necessary for passage in the House of Representatives.  Last year, eight state lawmakers co-sponsored legislation to implement a state income tax.

“In these tough economic times, Tennesseans need jobs and don’t need to be worrying about having to pay a state income tax,” added Sen. Kelsey.  “It’s time to let the people vote on the issue and put this matter to rest.”

The resolution would allow Tennesseans to vote to prohibit the income tax in three years.  Prior to that, it will need to pass the House in the coming weeks and to pass the Senate and House by a two-thirds vote in two years.
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