The Center Square – Many of the laws passed during the recent Tennessee Legislative session will go into place July 1, the beginning of the new fiscal year, including a $412 million tax cut.
That cut includes $272.8 million toward a three-month grocery tax holiday between Aug. 1 and Oct. 31 along with changing the state franchise and excise business taxes to single sales factor taxes like 32 other states.
The law also creates a two-year pilot for a family-leave tax credit that will be created for businesses that give employees from two to 12 weeks of paid leave, providing at least 50% of normal wages over that period.
“These bold tax cuts will provide more growth opportunities for businesses and financial relief for families on everyday expenses,” said Senate Majority Leader Jack Johnson, R-Franklin. “Tennessee is one of the lowest taxed states in the nation, and this move to further cut taxes strengthens our dedication to being a pro-business and pro-family state.”
Another bill puts $194 million worth of school safety grants in place along with a requirement that schools keep doors locked at all times while students are present and requires school safety plans to be in place.
A few of the July 1 laws are also being challenged in court, including a teacher minimum pay increase that goes along with an end to the teacher option for automatic withdrawal of professional dues such as those for the Tennessee Education Association.
“These pay raises will help recruit and retain talented teachers and mitigate teacher shortages. I look forward to continuing our work to support Tennessee teachers,” said Sen. Bill Powers, R-Clarksville, who sponsored the bill.
The TEA sued to block that portion of the bill, saying it violates a single-subject requirement for bills, the details weren’t included in the bill’s caption, and doesn’t disclose the bill repeals the Professional Educators Collaborative Conferencing Act, the state’s negotiation law.
Another bill being challenged in court changes the makeup of the Metropolitan Nashville Airport Authority board. The Federal Aviation Administration says it will continue to recognize the current board, not a new one, while Metro Nashville’s lawsuit on the matter is pending.
July 1 also will begin a new tax structure for Tennessee's mobile sportsbooks, becoming the first state to tax sports gambling based on gross wagers at 1.85% of all bets.
In May, the new law would have cut the state's taxes collected from $7.1 million to $5.2 million.