(The Center Square) – State Sen. Bo Watson said he knew he wasn’t going to get a bill removing the tax on groceries through a Tennessee Senate subcommittee with a positive recommendation.
He was right.
“Any questions for the sponsor that may break up this pipe dream here?” asked committee Chairman Joey Hensley, R-Hohenwald.
Watson’s bill and a proposal by Sen. Charlene Oliver, R-Nashville, that would also remove the tax were given a negative recommendation by the Senate Finance, Ways, and Means subcommittee on Tuesday.
Sen. Jeff Yarbro, R-Nashville, casts the lone “no” vote for the negative recommendation for the bills.
Watson, R-Hixson, presented a bill that did not have a mechanism for replacing the more than $800 million in lost revenue if the tax was eliminated.
Democrats proposed closing “corporate tax loopholes” to make up for the $700 million to $1 billion that could be returned from the state to taxpayers if the tax is removed. They cite a report by the Institute on Taxation and Economic Policy that said Tennessee could realize $891 million in annual revenue by requiring companies to report its worldwide revenue, not just what it earns in the states.
Some states are already doing it, according to the report.
The House version of the Democratic bill sponsored by Rep. Aftyn Behn, D-Nashville, is on the Wednesday calendar for a Finance, Ways, and Means subcommittee, according to the Tennessee General Assembly’s website. The Republican bill, sponsored by Rep. Elaine Davis, R-Knoxville, does not have a hearing date.
No bills proposing sales tax reductions have fared well in the committee.
The committee also gave a negative recommendation that would have exempted the state sales tax from menstrual hygiene products proposed by Sen. Sara Kyle, D-Memphis.
Rep. Ferrell Haile’s bill that would remove the sales tax from infant formula, and diapers and wipes used by babies and children was also given a negative recommendation.
Gov. Bill Lee proposed no tax breaks in his $59.5 billion budget.
