State Rep. Johnny Garrett Halts $800 Million Tax Increase Sponsored by Democrat

Johnny Garrett

State Representative Johnny Garrett’s (R-Goodlettsville) amendment to a Tennessee bill that would have enacted a massive tax increase passed Wednesday in the Finance, Ways, and Means Subcommittee.

According to a fiscal note on the bill before it was amended, it would have increased state revenue by nearly $800 million in taxes on business enterprises.

HB2043/SB1934—solely sponsored in the State House by State Representative Aftyn Behn (D-Nashville)—would eliminate state and local taxes on food and ingredients. However, the bill’s original language would have also enacted the “Business Enterprise Tax Act” and the “Worldwide Combined Reporting Act.” The State Senate’s bill version is also solely sponsored by two Democrats.

The Business Enterprise Tax Act would have levied a .75 percent tax “upon the taxable enterprise value tax base” of every business in the state with gross business receipts exceeding $250,000, according to the fiscal note.

“This is a bait-and-switch bill that punishes virtually every business owner in Tennessee,” Garrett (pictured above) said about the legislation in a press release from the Tennessee House Republican Caucus.

In the Finance, Ways, and Means Subcommittee on Wednesday, Behn said she disagreed with the assessment of the Fiscal Review Committee, which authored the fiscal note. She also pushed back on Garrett’s claim that small businesses would be penalized, instead arguing it would be “an accountability mechanism” for large corporations in Tennessee.

The fiscal note continued that under the Business Enterprise Tax Act, Tennessee’s Department of Revenue would require a new system expanding upon its existing resources. The department estimated that implementing the tax would cost $1 million.

Yes, Every Kid

Behn said the Worldwide Combined Reporting Act would have calculated “a company’s total global revenue and then taxed the portion in Tennessee.”

Alternatively, the fiscal note cited a cost-benefit analysis by the New Hampshire Commission on Worldwide Combined Reporting, which found that “the revenue impact of such a law is not determinable and may have an impact on state investments including foreign investment.”

The Business Enterprise Tax Act and Worldwide Combined Reporting Act are based on current New Hampshire law.

After adopting the amendment, the subcommittee placed the bill behind the state’s budget because the bill has a fiscal impact on the state. If signed by the governor, the bill would become law on January 1, 2025.

“Our tradition of good governance has served us extremely well in tough times and now as we fight against the federal government’s reckless inflationary policies,” Garrett said in the release. “House Republicans will continue to deliver the wise fiscal stewardship Tennesseans have come to expect and deserve.”

– – –

Matthew Giffin is a reporter at The Tennessee Star and The Star News Network. Follow Matthew on X/Twitter.

 

 

 

Related posts

3 Thoughts to “State Rep. Johnny Garrett Halts $800 Million Tax Increase Sponsored by Democrat”

  1. Colleen Sanders

    Excellent work, Representative Garrett. Thank you for protecting our businesses that provide jobs for millions of working people in our state.

  2. Randy

    The elimination of waste fraud and abuse of tax payer dollars would have more than covered the elimination of this tax. Our legislature and local governments give away tax revenue every day. Simply defining the actual definition of legitimate government functions would save the public billions of dollars. Ignoring the the fact that we can’t keep track of where the money goes is criminal.

  3. John Bumpus

    Thank you, State Representative Garrett.

Comments