The Tennessee House passed a bill cancelling the excise tax on certain COVID-19 payments given to businesses. The legislation would cover all payments from March 1 to December 31 of last year.
If passed, the bill (HB776 and SB775) would apply to payments from the Tennessee Business Relief Program, the Tennessee Supplemental Employer Recovery Grant Program, the Coronavirus Agricultural and Forestry Business Fund, the Hospital Staffing Assistance Program, the Emergency Medical Services Ambulance Assistance Program, the Tennessee Small and Rural Hospital Readiness Grants Program, or the federal Child Care and Development Block Grant.
The measure originated as a proposal to prepare a report on COVID-19 small business relief payments. Then, the Finance, Ways, and Means Committees for both the House and Senate would’ve received the report by December 31 of this year. It was the amendment sponsored by State Representative Patsy Hazlewood (R-Signal Mountain) that made the bill.
The current fiscal note attached to the proposed legislation only addresses the original legislation. No estimated fiscal impact has been attached for the rewrite of the bill through Hazlewood’s amendment.
The original sponsor of the bill, State Representative Ron Gant (R-Rossville), explained that current COVID-19 relief payments issued by the state may be treated as taxable income by the federal government.
Hazlewood added that these businesses shouldn’t be challenged further following pandemic regulations and shutdowns.
“[I] think it’s important that we don’t tax these businesses on funds that they obviously need to keep up and running,” said Hazelwood.
On Monday morning, before the House considered the bill, the Tennessee Department of Revenue issued a press release on the bill’s progress in the General Assembly.
The House passed the bill unanimously, 92 to 0. The Senate Finance, Ways, and Means Committee is scheduled to consider the bill on Tuesday.
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