Contact:  Darlene Schlicher (615) 741-6336 or email:  darlene.schlicher@capitol.tn.gov

(NASHVILLE, TN), March 29, 2010 -- The State Senate today approved a resolution that will allow Tennesseans to vote on a constitutional amendment to clarify the state’s prohibition of an income tax and a payroll tax in Tennessee.  The amendment, Senate Joint Resolution 763, sponsored by Senator Brian Kelsey (R-Germantown), 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. 

“I am pleased this amendment has passed the Senate,” Kelsely added.  “This is the first step in allowing Tennesseans to vote once and for all to permanently ban an income tax and payroll tax.”

A payroll tax has been proposed in recent years by elected officials in Shelby County and elsewhere as a way around an income tax.  A state income tax proposal has repeatedly come before state lawmakers over the last several decades, including failure by only five votes in the House of Representatives in 2002.   In January, eight state lawmakers, seven of whom represent Shelby County, filed legislation, House Bill 3597, to implement a state income tax.  

“In these difficult economic times, the last thing Tennesseans need to be worrying about is having to pay a state income tax or a payroll tax,” Kelsey added. 
 
There have been three cases before the Tennessee Supreme Court throughout the state’s history that have upheld that the income tax is unconstitutional.  The most recent case was decided in 1964, and this case has never been overturned.  However, attorney general opinion in 1999 opined that the tax is legal.

The opinion has prompted elected officials in Tennessee to continue to propose both an income tax and a payroll tax in recent years.
In order for a constitutional amendment to pass, it must first be approved by a simple majority in both the House and the Senate this year.  Then, it must be approved by a two-thirds vote in each chamber during the next General Assembly in 2011-2012.  After that the amendment would be placed on the next gubernatorial ballot for ratification by the people in November 2014.

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