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Thursday, July 10, 2014

Tracy files EBT abuse, excise tax relief bills

Friday, February 1, 2013

State Sen. Jim Tracy (R-Shelbyville) and State Rep. Terri Lynn Weaver (R-Lancaster) have filed legislation in the Tennessee General Assembly to curb abuse of purchases made through Electronic Benefit Transaction (EBT) cards used by recipients of the Temporary Assistance to Needy Families (TANF) program.

Senate Bill 244 prohibits use of a welfare recipient's EBT card in establishments that primarily sell tobacco products, tattoo facilities, psychic services, adult cabarets, and any establishment open to the public where liquor, wine, beer, or other alcoholic beverages are served for consumption on the premises.

"It is outrageous that these benefit cards, which are meant to help feed families with children in times of desperate need, are reported to have been misused for everything from theatre tickets and a tour of Graceland, to the purchase of alcohol and nightclub entertainment," said Tracy in a news release. "Tennessee law should make it perfectly clear that we will not tolerate this fraudulent use of taxpayer money."

The legislation comes after a report was released last summer by the Beacon Center of Tennessee, which uncovered numerous examples of abuse by welfare recipients. According to the report, EBT cards were swiped at liquor stores, nightclubs, malls, retail outlets, and adult entertainment establishments, as well as for a hotel stay and UPS services, among others. The Center reported one transaction at a liquor store totaling $790.

"This money is supposed to be used to feed children in struggling families, providing them with essentials until the family gets back on their feet," said Weaver. "We need to put some teeth in our law to ensure that this abuse does not happen again."

Under the bill, welfare recipients who use EBT benefits for alcohol, tobacco or a lottery ticket would be subject to disqualification from the program. The legislation also prescribes civil penalties to businesses that sell those products and accept EBT benefits as payment in violation of the law.

The fine for a violation by the seller would be $100 for the first violation, $500 for the second violation within five years, and $1,000 for a third or subsequent violation within five years.

In addition, the legislation calls for welfare recipients who purchase prohibited items or services to reimburse the state for the illegal purchase.

Excise tax relief

Meanwhile, Tracy and State Rep. Cameron Sexton (R-Crossville) have introduced legislation to reduce the excise tax on Tennessee businesses. The "Investing in Tennessee's Existing Businesses Act", HB64/SB245, seeks to reduce Tennessee's excise tax from 6.5 percent to 6.25 percent.

"Over the last decade, Tennessee has given over a billion dollars in incentives to new companies looking to relocate to our great state. While we need to continue to actively recruit new businesses, we must not forget about our existing businesses," said Sexton in a news release.

In the last fiscal year, over 41,000 businesses had to pay the tax, with an average estimated yearly tax payment of $29,000 per business.

"Too many times economic development efforts are focused on recruiting new businesses and not focused on keeping and growing our current businesses. I feel like this is a great incentive and a way to reward the businesses that have helped Tennessee grow here at home," said Tracy.

"Tennessee's existing businesses are our key to continued long-term economic growth. Reducing their tax burden and allowing the businesses to make the decision on how or when to use the additional revenue ensures minimum government interference," said Sexton.

Last year, Tennessee was ranked as having the fourth best business climate by the Wall Street Journal.

"Tennessee does not have a personnel income tax," said Tracy, "but unfortunately our excise tax is a corporate income tax. We can't wait for other states to pass us before we act. We need to lead by example and establish a business tax structure that ultimately rewards existing businesses and invites new businesses to Tennessee without having to provide hundreds of million dollars in incentives."

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