NASHVILLE, Tenn. (WKRN) — Governor Bill Lee signed the Tennessee Works Tax Act into law Thursday, which will reportedly provide more than $400 million in savings for Tennessee families and businesses and includes a three-month grocery tax suspension.
The tax holiday is set to begin on Aug. 1. According to Gov. Lee’s office, it is the single largest tax cut in state history.
“Tennessee’s legacy of responsible fiscal stewardship has allowed our state to weather national economic storms while maintaining a balanced budget and cutting taxes for Tennesseans,” said Governor Bill Lee in a release. “We thank the General Assembly for partnering with us to make the right investments for Tennessee families and businesses while supporting our state’s future economic growth and success.”
Tennessee Works Tax Act includes:
- $273 million for a one-time, three-month sales tax holiday on grocery items to direct relief for Tennessee families from August 1 through October 31
- More than $150 million in annual small business tax relief, including raising the exemption threshold for the business tax, exempting the first $50,000 of net income from excise tax and protecting the first $500,000 in property investment from the franchise tax
- $64 million to simplify tax administration and conform with the federal bonus depreciation provisions of 2017 Tax Cuts & Jobs Act, allowing businesses to more quickly recover costs and further incentivize investment in Tennessee production
- Provides foundation for supporting Tennessee’s continued economic growth, aligning Tennessee with more than 30 states by adopting “single sales factor” apportionment for franchise and excise tax
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Gov. Bill Lee also signed new legislation Wednesday into that law that focuses on strengthening safety at schools in Tennessee. The legislation invests more than $230 million into public and private schools aimed to increase safety.
Following the Covenant School shooting, Lee announced a new budget amendment that added funding for school security, including $140 million for public schools to hire school resource officers (SROs) and highly-trained guards, a new grant fund for both public and non-public schools, and increased mental health funding.