Tennessee Governor Bill Lee has signed the Tennessee Works Tax Act, the single largest tax cut in state history, providing over $400 million in savings for Tennessee families and businesses, according to a Thursday press release.
This historic legislation aims to support future economic growth in the state and includes a three-month grocery tax holiday beginning on Aug 1.
“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 Lee.
He expressed gratitude to the General Assembly for their partnership in making the right investments for Tennessee families and businesses while supporting the state’s future economic growth and success.
The Tennessee Works Tax Act (SB275/HB323) includes a variety of provisions designed to provide relief to both families and small businesses:
- $273 million for a one-time, three-month sales tax holiday on grocery items from August 1 through October 31
- Over $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 the 2017 Tax Cuts & Jobs Act, allowing businesses to more quickly recover costs and further incentivize investment in Tennessee production
- Adoption of a “single sales factor” apportionment for franchise and excise tax, aligning Tennessee with more than 30 other states in supporting continued economic growth
Department of Revenue Commissioner David Gerregano expressed pride in partnering with Governor Lee and the General Assembly to provide tax relief for Tennessee businesses and families, while also laying a firm foundation for continued economic growth in the state.
Senate Majority Leader Jack Johnson applauded Governor Lee for the bold measure, stating, “We believe that Tennessee businesses and citizens are in the best position to decide how to spend their own money, and these tax-cuts demonstrate that we practice what we preach.”
Johnson emphasized Tennessee’s commitment to being a pro-business and pro-family state with low taxes.
House Majority Leader William Lamberth added, “These historic tax cuts mean more money for our citizens to invest, spend and save. It provides meaningful reforms that further solidify Tennessee’s standing as the most well-managed, fiscally stable state in the nation where families and businesses thrive.”