state taxes

Wheel tax referendum fell short on valid signatures in Hawkins County

A petition drive seeking a special election to consider repeal a recent $40-per-vehicle increase in the Hawkins County wheel tax fell 127 signatures short of the number required, according to the Rogersville Review. Indeed, county Election Administrator Donna Sharp says there were more invalid signatures than valid. Advocates needed 1,095 valid signatures.

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‘Bah, humbug!’ on sales tax holidays (from the Tax Foundation — and, kinda, UT’s Bill Fox in an update)

(Note: If you’ve looked at TV news, listened to the radio or read any newspaper in Tennessee the past few days or so, you will have seen reports on the “tax holiday” — no sales tax on designated purchases — this weekend. The statewide USA Today Network – Tennessee version is HERE. On the other hand, there’s this.)

 

News release from The Tax Foundation

Washington, DC (July 25, 2017) – Sales tax holidays represent poor tax policy, costing states revenue while providing little benefit, according to a new Tax Foundation report.

More policymakers are recognizing this less-than-desirable tradeoff; Tennessee is one of only 16 states to use sales tax holidays for 2017, down from a peak of 19 states in 2010. Tennessee will offer a back-to-school sales tax holiday July 28-30.

Key Findings:
  • Sales tax holidays create additional tax compliance costs, but larger businesses tend to lobby for the holidays as a form of free advertising.
  • Most sales tax holidays involve politicians picking products and industries to favor with exemptions, arbitrarily discriminating among products and across time, and distorting consumer decisions.
  • While sales taxes are somewhat regressive, this does not make sales tax holidays an effective tool for providing relief to low-income individuals. In order to give a small amount of tax savings to those with lower incomes, holidays give a large amount of savings to higher-income groups as well.
  • Political gimmicks like sales tax holidays distract policymakers and taxpayers from genuine, permanent tax relief. If a state must offer a “holiday” from its tax system, it is an implicit recognition that the state’s tax system is uncompetitive. If policymakers want to save money for consumers, then they should cut the sales tax rate year-round.
“Sales tax holidays have enjoyed political success, but recently, policymakers are reevaluating them,” the report says. “Rather than providing a valuable tax cut or a boost to the economy, sales tax holidays impose serious costs on consumers and businesses without providing offsetting benefits.”
The full report is HERE.

UPDATE: From a USA Today story, citing the posted news release:

Some critics contend that consumers might save even more without the holidays, as retailers would mount sales of their own timed to events such as back-to-school.

Bill Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee, said he took advantage of Tennessee’s recent holiday to buy several pairs of running shoes. “That 9 ¼ percent I saved is minuscule in terms of ‘savings,’ ” he said. “The stores would be giving a much better discount if they had a sale. Back-to-school sales would have been like 25 percent off, not 9 percent, and people would have saved more.

Petitions filed to hold vote on Hawkins County wheel tax increase

Petitions were submitted Monday calling for a referendum on whether a $40-per-vehicle wheel tax approved by the Hawkins County Commission will stand, reports the Rogersville Review.

The Commission had rejected the increase in a initial vote earlier this year, but then approved it after Jason Mumpower, deputy state comptroller, warned the officials that failure to enact a balanced county budget by July 1 would mean a state takeover of county finances.

Hawkins County Elections Administrator Donna Sharp says that, if the petitions contain enough valid signatures, a special election will be scheduled within 90 days at a cost of $70,000 or so.

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June TN tax collections: $112M over budget estimates

News release from Department of Finance and Administration

NASHVILLE,  Tenn. – Total tax revenues for June were above budgeted expectations. Finance and Administration Commissioner Larry Martin announced today that overall Tennessee tax revenues in June, led by strong growth in franchise and excise (F&E) taxes, were $1.4 billion, which is $112.1 million more than the state budgeted.

“While we are encouraged by the positive revenue numbers, we need to be mindful of two important points,” Martin said. “First, the Funding Board in November 2016 revised upward for the fiscal year 2017 budget the anticipated positive variance for overall Tennessee taxes. As a result, $663.3 million of the fiscal year 2017 unaudited year to date positive variance of $731.3 million general fund revenue is already included in the fiscal year 2018 budget. Secondly, F&E tax payments by businesses are estimates of their tax liability and are subject to change.”

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After IMPROVE, Haslam promotes benefits while AFP trashes ‘massive $2 billion tax hike’

While Gov. Bill Haslam is touting the benefits of his IMPROVE Act tax package, Americans for Prosperity is doing just the opposite in its own statewide campaign, according to reports in the Knoxville News Sentinel and in the Kingsport Times News.

The governor, speaking at an IMPROVE Act promotional event in Elizabethton last week, said the road projects funded by the package’s fuel tax increase will have a “huge economic impact” benefiting the state.

“We’re also putting money back in citizens’ hands. They will have more money to grocery shop … the other thing is the cut on manufacturers. Somebody like Eastman obviously produces a lot of jobs. Eastman will now have more incentive to keep those jobs in Tennessee because the tax they pay as a manufacturer will be more in line with our neighboring states.”

AFP Tennessee, meanwhile, is going around the state holding rallies to thank legislators who voted against the Haslam-sponsored measure and cites an American Legislative Exchange (ALEC) statement saying the overall package means Tennesseans will pay a net of $2 billion in additional taxes over the next ten years – despite the grocery tax cuts and corporate tax cuts.

“We knew the Improve Act was a tax increase for most Tennesseans,” AFP-TN State Director Andy Ogles said. “It is a shame only 43 lawmakers opposed this massive two-billion-dollar tax hike even as Tennessee had over a billion-dollar surplus, but those that did stand up for taxpayers deserve our thanks.”

(Note: The ALEC comment is included in a June “State of the States” roundup on gubernatorial doings nationwide. The whole thing, including the Tennessee portion, is HERE. The AFP press release is HERE. A Haslam news release on his promotional efforts is HERE.)

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Haslam differs with Trump, Beavers on highway funding

Gov. Bill Haslam, who toured the state Monday for ceremonial signings of his “IMPROVE Act,” declared along way that he’s not too keen on President Trump’s infrastructure plans — or on state Sen. Mae Beavers declaring she’ll push to repeal of the IMPROVE fuel tax hikes if elected to succeed him as governor.

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The governor’s ceremonial IMPROVE Act signing tour today

News release from the governor’s office

NASHVILLE – Tennessee Gov. Bill Haslam on Monday, June 5, will hold ceremonies in each of the three grand divisions of the state to sign the IMPROVE Act, a key piece of his NextTennessee legislative agenda that delivers a safe, reliable and debt-free transportation network for the next generation of Tennesseans while providing the largest tax cut in state history and making Tennessee more competitive in recruiting manufacturing jobs.

 Monday, June 5

10:15 a.m. EDT – Hamilton County Welcome Center, I-75 North, Chattanooga

(This location is near the site of the I-75/I-24 interchange modification project in Hamilton County to improve traffic flow at one of the most heavily traveled areas of Chattanooga through which more than 100,000 vehicles travel per day.) 

1:00 p.m. CDT – Acklen Park Drive (on I-440 overpass), Nashville

(This location is over the stretch of I-440 from I-40 to I-24 in Davidson County. The project includes pavement replacement and safety improvements to the 30-year old interstate that serves more than 100,000 vehicles per day.) 

3:00 p.m. CDT – U.S. 51 S. (at the future I-69 construction site, 0.5 miles southwest of Quality Inn), Union City

(This site will become the future I-69 in Union City and connect Obion County to the vital north-south corridor, creating greater access to other communities in west Tennessee and other states.) 

The IMPROVE Act, “Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy,” cuts nearly $300 million in taxes next year and more than $500 million in taxes annually at full implementation, including a 20 percent decrease in the sales tax on groceries and a $113 million reduction in business taxes on manufacturers.

 Nearly 1,000 road and bridge projects across all 95 counties will be delivered through a conservative, responsible and user-based approach of raising the gas tax by six cents and diesel tax by 10 cents, each over the next three years.

 Majority Leader Mark Norris (R-Collierville) and Reps. Barry Doss (R-Leoma) and Bill Dunn (R-Knoxville) sponsored the legislation.

Sen. Crowe to seek reelection; downplays gas tax retribution talk

State Sen. Rusty Crowe tells Robert Houk that he will run for reelection in 2018, saying he got an “outpouring of support” for another four-year term after Houk did an earlier column on speculation that he would retire.

“It got my energy up to see support coming from so many points,” he said.

Crowe, 70, will complete his 28th year in the Senate next year. His reelection decision is mentioned in a column devoted largely to talk that Washington County road projects got left off Gov. Bill Haslam’s three-year funding plan, recently announced, because local House members – Reps. Matthew Hill and Micah Van Huss – opposed the governor’s gas tax bill.

Crowe, who voted for the IMPROVE  Act, has been trying to downplay that notion.

Even so, Crowe admitted the House leadership is more prone than that of the Senate to dole out punishment at budget time to members who don’t fall in line. That retribution usually comes in the form of no funding for pet projects.

Crowe said he respects the reasons his colleagues in the House have given for not voting to increase the fuel tax. He said he was in a similar situation 17 years ago when he refused to support Republican Gov. Don Sundquist’s push for a state income tax. Crowe believes that stand cost him his job at East Tennessee State University.

The senator also said that House members “seemed to be pulling in very different directions… It was like herding cats.”

Ron Ramsey: House members were punished for opposing gas tax hike

Former Lt. Gov. Ron Ramsey says there was “some punishment” levied against state House members who opposed Gov. Bill Haslam’s fuel tax increases, reports the Johnson City Press. He spoke at a Transportation Coalition of Tennessee press conference, one of several being held around the state by the group that promoted the fuel tax and hired Ramsey as a consultant.

“I think there is some in the House who would not vote for any kind of, what they perceived as, a tax increase. And that’s just wrong because the overall bill cut taxes,” Ramsey… said. “There was no doubt, in the end, that there was some punishment levied against some House members on funding. Not against the Senate members, but against the House members.”

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Haslam lists highway projects to be completed in next three years

News release from Department of Transportation

NASHVILLE – Tennessee Gov. Bill Haslam and Tennessee Department of Transportation Commissioner John Schroer today released TDOT’s annual three year transportation program, featuring approximately $2.6 billion in infrastructure investments for 101 individual project phases in 40 counties, as well as 15 statewide programs.

The three-year program is more robust than previous years, due to funding increases through the IMPROVE Act, which is projected to raise an additional $150 million to meet the state’s infrastructure needs in FY 2018. This increase, combined with $120 million repayment to the highway fund, provides the necessary funds to move several backlogged and new transportation projects forward in the first year of the program. Those include:

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Former Knoxville News Sentinel capitol bureau chief Tom Humphrey writes about Tennessee politics, government, and legislative news.

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