The House Republicans in Tennessee have passed a bill that promises the biggest tax cut in the state’s history, providing $407 million in cuts, impacting every Tennessean.
Tennessee passed the niggest tax cut. (Photo: FORBES)
Tennessee Works Tax Reform Act of 2023
The Tennessee Works Tax Reform Act of 2023 seeks to reduce the tax burden on businesses, stimulate economic growth and entrepreneurship, and provide tax relief to families. The bill, sponsored in the House by Majority Leader William Lamberth and Assistant Majority Leader Mark Cochran, is part of Governor Bill Lee’s legislative initiatives for 2023.
The tax cut is expected to make a significant impact on small businesses, by reducing the burden of franchise and excise tax, and the business tax rate. Over 23,000 small businesses in Tennessee will be able to reduce their excise tax liability to zero by excluding the first $50,000 in income, and $500,000 of the business property will be exempt from franchise tax liability, according to a published article in THUNDER.
Additionally, the tax cut will increase the threshold for business tax exemptions from $10,000 to $100,000 of gross receipts, thereby exempting 140,000 Tennessee businesses from the business tax. The highest rate will also reduce from 0.3% to 0.1%.
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What the Bill Seeks and Ensures?
Furthermore, the bill seeks to promote hiring in Tennessee by incentivizing businesses to provide paid family leave to employees by creating a state-paid family leave the franchise and excise tax credit on wages paid for a two-year pilot period. The bill also ensures state tax deductions for research and development (R&D) expenses that help companies grow and produce superior products and services.
The bill passed by House Republicans supports Governor Bill Lee’s strategy to promote economic growth in Tennessee, boost small business formation, and maintain the state’s status as the second-lowest taxed state in the nation. The Senate is currently advancing a companion version of the bill.
