NASHVILLE, Tenn. (WKRN) — While much has been said about where Gov. Bill Lee wants to spend money in his proposed state budget, some tax-cutting proposals have not gotten as much attention.
One of the measures outside the governor’s budget comes from Assistant House Majority Leader Ron Gant who would like to make cuts in the state’s excise tax, which is levied against businesses’ gross earnings.
Gant hopes to cut the 6.5% yearly excise tax rate by 0.10% each year for the next five years if the state’s growth rate is more than 2%.
“The gist of it is to give money back to those local businesses and hopefully they reinvest,” Gant said last week while outlining his bill.
He sees that reinvestment for businesses as “new employees” and “expanding their business.”
Gant’s House Bill 2301 has various triggers to revert back to the current 6.5% for the excise tax if the state’s economic growth slows down dramatically.
Gov. Lee’s main tax-cutting measure centers on what is called the state’s professional privilege tax.
“Its only fair that when a state is fiscally healthy, some of the money is returned to the taxpayer,” the governor said during his annual State of the State address on Feb. 3.
He added that halving the $400 yearly fee paid by doctors, lawyers and other professions would add “$40 million to individuals and small business owners who pay this arbitrary and unfair tax.”
Cutting the excise tax by a 0.10% would save business owners statewide about $18 million.
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