AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 6, relative to exemptions from sales and use tax.
Impact
The changes introduced by SB2108 are expected to have a direct impact on the retail sector by modifying how sales tax is applied to clothing and footwear purchases. Specifically, the bill proposes to lower the tax exemption threshold for clothing items from $100 to $80, while allowing shoes priced at $150 or less to be exempt from sales tax. These revisions could encourage consumer spending in local businesses, particularly those specializing in clothing and footwear, and may have a positive impact on economic growth within Tennessee.
Summary
Senate Bill 2108 aims to amend Tennessee Code Annotated, specifically Title 67, Chapter 6, which governs exemptions from sales and use taxes. The primary modifications proposed by SB2108 include redefining what constitutes as clothing and shoes, along with adjustments to pricing thresholds that influence tax exemption qualifications. By delineating 'shoes' more clearly as protective foot coverings, the bill seeks to provide tax exemptions for a broader range of footwear items intended for general use, thus making footwear more accessible from a financial standpoint.
Contention
Notably, the revisions of thresholds and definitions could draw debate among legislators interested in fiscal policies, as some may view the lowered exemption threshold as a means to increase state revenue through tax collections, while others could see it as a necessary adjustment to support families in their purchasing decisions. Critics may express concerns about how these tax modifications will affect equality in taxation and the overall efficiency of tax enforcement. As such, discussions surrounding SB2108 could involve differing opinions on the balance between promoting economic activity and ensuring equitable tax revenue collection.