Tennessee House Bill HB2586

Tennessee 2023-2024 Regular Session

• Introduced: 1/30/24
• Refer: 2/5/24

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, Part 17, relative to taxation.

Impact

The implementation of HB2586 would directly affect state revenue collection and fiscal policy in Tennessee. By allowing for the suspension of the privilege tax in certain favorable financial conditions, the bill introduces a mechanism for the state to adjust its tax policies based on actual revenue collections rather than projected needs. This not only reflects a commitment to financial responsibility but also positions the state to enhance taxpayer relations by reducing tax liabilities when budget surpluses occur.

Summary

House Bill 2586 seeks to amend specific sections of the Tennessee Code Annotated regarding the privilege tax, particularly outlined under Title 67, Chapter 4, Part 17. The primary focus of the bill is to establish conditions under which the privilege tax would be suspended for a fiscal year. Notably, if the state receives over-collections of tax revenues exceeding $500 million in the prior fiscal year, the privilege tax will not be required for that year. This is intended to provide relief during times of surplus revenue, ensuring that taxpayers are not overburdened by taxes that are deemed unnecessary due to excessive state income.

Contention

There may be points of contention surrounding the bill, particularly regarding the criteria for 'over-collections' and how these funds are utilized within the state budget. Critics might argue that while the suspension could provide immediate respite for taxpayers, it could impact the funding available for public services that rely on this revenue. Questions could arise about how consistently the state will meet the stipulated criteria for suspending the tax, and whether this could create unpredictability in funding for state operations and local services during the years that these tax breaks are enacted.