Sen. Southerland’s update on new bills, tax cuts

From the desk of Senator Steve Southerland:
(NASHVILLE) March 10, 2023 — The Tennessee Works Tax Reform Act of 2023<> is advancing in the Senate and cleared the Senate Revenue Subcommittee with a positive recommendation on Tuesday. This legislation proposes a number of changes to Tennessee’s tax code to lower the tax burden on businesses, boost Tennessee’s economic competitiveness, promote entrepreneurship and small business formation, and provide targeted relief to families.
The tax cuts would provide significant tax relief to small businesses by lowering the burden of the franchise and excise tax as well as the business tax rate. Under the proposal, over 23,000 small businesses in Tennessee will have their excise tax liability reduced to zero by exempting the first $50,000 in income. Up to $500,000 of business property from franchise tax liability will also be exempt.  The tax cuts would exempt 140,000 Tennessee businesses from the business tax by raising the threshold for business tax exemptions from $10,000 to $100,000 of gross receipts. In addition, it reduces the highest business tax rate from 0.3 percent to 0.1 percent.
The proposal will help Tennessee lead the nation in economic competitiveness, while prioritizing Tennessee businesses. It incentivizes businesses to hire Tennesseans and headquarter in Tennessee by changing the way the excise tax is calculated to favor businesses with a higher percentage of their properties and jobs located in Tennessee than in other states. It also ensures state tax deductions for research and development (R&D) expenses – which help companies grow, innovate, and produce superior products and services. This move comes after the federal government ended yearly R&D tax exemptions for businesses.  The measure also removes taxes on certain manufacturing facilities with unsold inventory.
The proposal will also deliver for working families by creating a three-month sales tax holiday on food during August, September, and October 2023. It also incentivizes businesses to provide paid family leave to employees by establishing a state paid family leave franchise and excise tax credit on wages paid for a two-year pilot period.
General Assembly confirms new Tennessee Supreme Court Justice
Members of the General Assembly confirmed the appointment of Dwight E. Tarwater to the Tennessee Supreme Court in a joint session in the House chamber on Thursday.
Tarwater, a Knoxville attorney, brings more than 40 years of legal background to the court, including decades of trial and appellate experience. He also previously served as chief legal counsel to former Gov. Bill Haslam from 2014 until 2019.
The vacancy on the Tennessee Supreme Court will be created by the retirement of Justice Sharon Lee, effective Aug. 31. The General Assembly is required to confirm appointments for Supreme Court Justices per an amendment added to the state constitution in 2014. Justices are retained through a “yes” or “no” election every eight years.
Also on Thursday, the General Assembly confirmed the appointment of Matthew Wilson to the Tennessee Court of Criminal Appeals for the Western Section. Wilson previously served as an assistant United States attorney in the Western District of Tennessee. He brings significant criminal law experience to the Court of Criminal Appeals, including nearly 20 years of legal service at both the state and federal levels. Wilson fills a vacancy that was created by the death of Judge John Everett Williams in September.
Strengthening election integrity – The Senate approved legislation to strengthen election integrity in Tennessee by preventing the abuse of “fail-safe balloting.” Under the current process, if the address on a voter’s ID does not match his/her current address, then that voter casts a fail-safe ballot and signs an affidavit stating that he/she does live at the address where the vote is being cast. Senate Bill 854<> would allow a candidate to request a list of all the voters who changed their address at the polling place to vote in the election along with copies of the fail-safe affidavits. This bill also states that in the event of a recount, the state election commission must verify the addresses of all fail-safe ballots.
Thank you for reading this column! Please contact my office to share your thoughts about any legislation. My office can be reached by phone at: (800) 449-8366, extension: 13851 or by e-mail at:<>. Thank you for the honor to serve you in state government and God bless!