Tennessee Income Tax Prohibition, Amendment 3 (2014)
- 1 Text of measure
- 2 Background
- 3 Support
- 4 Opposition
- 5 Path to the ballot
- 6 See also
- 7 External links
- 8 References
The Tennessee Income Tax Prohibition, Amendment 3 is on the November 4, 2014 ballot in the state of Tennessee as a legislatively-referred constitutional amendment. The measure, upon voter approval, would prohibit the legislature from levying, authorizing or permitting any state or local tax upon payroll or earned personal income.
Text of measure
The official ballot text reads as follows:
|“|| Shall Article II, Section 28 of the Constitution of Tennessee be amended by adding the following sentence at the end of the final substantive paragraph within the section:
Notwithstanding the authority to tax privileges or any other authority set forth in this Constitution, the Legislature shall not levy, authorize or otherwise permit any state or local tax upon payroll or earned personal income or any state or local tax measured by payroll or earned personal income; however, nothing contained herein shall be construed as prohibiting any tax in effect on January 1, 2011, or adjustment of the rate of such tax.
|Notwithstanding the authority to tax privileges or any other authority set forth in this Constitution, the Legislature shall not levy, authorize or otherwise permit any state or local tax upon payroll or earned personal income or any state or local tax measured by payroll or earned personal income; however, nothing contained herein shall be construed as prohibiting any tax in effect on January 1, 2011, or adjustment of the rate of such tax.|
|“||ESTIMATED FISCAL IMPACT:
There is no general state income tax in Tennessee. There is, however, an income tax on dividends from stocks and interest on certain bonds. This income tax is known as the “Hall Income Tax.” The tax rate is 6%. Constitutionally, Tennessee could enact an income tax on wages, salaries and so on. Amendment 3 would amend the constitution to prohibit the possibility of an income tax in the future.
The measure was supported in the legislature by Sen. Brian Kelsey (R-31).
- US Sen. Lamar Alexander (R)
- Sen. Brian Kelsey (R-31)
- Sen. Rusty Crowe (R-3)
- Rep. Glen Casada (R-63)
- Beacon Center of Tennessee
Travis H. Brown, a columnist for Forbes, called the amendment "absolutely critical." The following is an excerpt from his article on Amendment 3:
|“||... By prohibiting the future implementation of an income tax, Tennessee is lighting a bright neon “Open” sign that will attract families and businesses alike...
Anyone with an interest in data should quickly see why Tennessee must set its no-income-tax status in stone. As my Wealth of States coauthor, the esteemed economist Dr. Art Laffer, often says, “Taxation doesn’t generate revenue, it moves people,” [sic] Between 1992 and 2011, the state gained $10.55 billion in net adjusted gross income, with the lion’s share coming in from such high-tax states as California, Michigan, and Illinois. The nonpartisan Tax Foundation ranks Tennessee as 15th-best in the nation on its 2014 State Business Tax Climate Index. And it’s not just small to mid-sized businesses that are taking note of Tennessee’s sunny tax climate; global players like Amazon have opened giant warehouses in the state.
Tennessee is a significant player in the Heartland tax revolution, creating real opportunities for working families while Washington, D.C., sputters and stagnates on tax reform. Heartland states understand the need to compete, both on a national and international stage. A yes vote on Amendment 3 sends the clearest of messages: In order to stay competitive, Tennessee must eliminate the possibility of an income tax, today and tomorrow... 
—Travis H. Brown
Other arguments in support of the amendment include:
- Tennesseans for Fair Taxation
- Tennesseans for Fair Taxation’s Jim Von Bramer called the amendment “irresponsible.” He said, “Permanently blocking an income tax lets the wealthiest Tennesseans walk away from paying a fair share of state and local taxes forever while the rest of us pay much more of our income on food taxes and the basic necessities we buy from our local retailers. Our state budget gap will likely only grow as the federal budget shrinks. We are headed into a dark place, and now the state Senate says we should throw away our flashlight.”
Path to the ballot
- See also: Amending the Tennessee Constitution
The proposed measure was filed in the Tennessee Legislature on January 13, 2011 by Sen. Brian Kelsey (R-31).
The Tennessee General Assembly was required to approve the amendment in two successive sessions. In the first session, the measure required a simple majority for approval. In the second session, the proposed amendment needed to earn a two-thirds vote for approval. SJR 1 was approved by the Tennessee Senate for a second time on February 14, 2013. SJR 1 was approved by the Tennessee House of Representatives for a second time on April 8, 2013.
February 14, 2013 Senate vote
|Tennessee SJR 1 Senate Vote|
April 8, 2013 House vote
|Tennessee SJR 1 House Vote|
- Tennessee Legislature, "Senate Joint Resolution 1," accessed January 23, 2014
- Chattanooga Times Free Press, "Tennessee House approves amendment to ban state income tax," January 12, 2012
- Tennessee Secretary of State, "Proposed Constitutional Amendment No. 1 for the November 4, 2014 General Election Ballot," accessed June 12, 2014
- Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
- Tennessee General Assembly Fiscal Review Committee, "SJR 1 Fiscal Note," accessed April 16, 2014
- Chattanooga Times Free Press, "Avoid Tennessee income tax," February 18, 2011
- Knoxville News Sentinel, "Political notebook: Alexander backs proposed amendments on Tennessee ballot," July 21, 2014
- Bloomberg Businessweek ,"Senate OKs measure to ban Tenn. income tax," March 9, 2011
- Beacon Center of Tennessee, "Yes on Amendment 3," June 20, 2014
- Forbes, "How Tennessee Voters Could Achieve A Multi-Generational Economic Boom," September 12, 2014
- Tennessee Legislature, "Bill Information for SJR0001," accessed January 23, 2014
State of Tennessee
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