Tennessee House Bill HB2855

Tennessee 2023-2024 Regular Session

• Introduced: 1/31/24
• Refer: 2/5/24

Caption

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

Impact

The implications of HB2855 are significant, as it effectively seeks to phase out the occupation tax that currently imposes financial burdens on businesses and professionals in Tennessee. By setting the privilege tax to zero starting in June 2025, the bill is positioned to foster an economic relief for many who have been operating under the current tax regime. This change can potentially encourage new business investments and growth within the state, particularly in sectors previously impacted by the tax.

Summary

House Bill 2855 aims to amend Tennessee's occupation tax structure as outlined in the Tennessee Code Annotated, specifically targeting Title 67, Chapter 4, Part 17. The bill establishes a new framework for when the occupation tax is assessed, shifting the tax year to commence on June 1 and conclude on May 31 of the following year. Notably, the bill sets a privilege tax rate of $400 for tax years ending on or before May 31, 2025, with no occupation tax levied thereafter, effectively eliminating this tax for professions registered under this section beginning June 1, 2025.

Contention

While supporters may argue that eliminating the occupation tax will bolster the state's economic growth and attract new businesses, there may be contention surrounding the loss of revenue that the state currently generates from this tax. Critics might raise concerns about the state’s ability to sustain itself economically without this source of income. Additionally, there could be differing opinions on how this transition will affect various professions and whether alternative measures or non-tax revenue sources should be considered to offset this budgetary change.