A constitutional amendment to ban an income tax in Tennessee passed the House yesterday.
By a 73-17 vote, the House approved the bill, which passed last year in the Senate. However, it still has two more hurdles to clear.
The measure must now be approved by a two-thirds vote of both chambers in the next General Assembly. If that happens it will then be placed on the ballot in 2014.
“I have a little bit of a problem with saying you’re never, ever going to do something because we don’t know what the future holds,” said state Rep. Charles Curtiss, who voted against the income tax ban. “Internet sales are the fastest growing segment of our economy and they are really eating into sales tax dollars. If that money disappears, what is the state going to turn to?”
Tennessee’s sales tax rate can be as high as 9.75 percent depending on the amount of the local option sales tax levied. The state’s portion of that is 7 percent.
The emergence of Internet purchases, which often do not add sales tax, hurts funding for state and local governments.
“If it keeps going like it has been, the brick and mortar buildings will be gone,” said Curtiss. “But hopefully Congress will step in and do something about this.”
State Rep. Judd Matheny voted for the constitutional ban and said it’s the right direction for the state to move.
“I hope we can finally put this issue to rest once and for all,” said Matheny. “The margin of the vote is proof positive people don’t want an income tax. To say we will not have one could be beneficial to attracting people to live here.”
Some opponents of the constitutional amendment say it’s unnecessary because the state constitution already bans an income tax.
However, Republican sponsor Glen Casada of Franklin says a judge could decide otherwise concerning the constitutionality of an income tax and the legislation is needed to make it clear it is not constitutional.