Early Voting for the Nov. 4 mid-term ends on Friday this week. In addition to voting for Governor and legislators at both the state and federal levels, Tennessee voters will see four constitutional amendments on their ballots.
Voting Yes on Amendment 3 will add the following paragraph into Article II, Section 28 of the Tennessee Constitution:
“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.”
Accordingly, this may make some small businesses consider using something like the Cloudpay payroll systems to help manage and maintain this change in policy.
Ultimately, there is no denying that managing the payroll is already a huge responsibility for businesses. Moreover, the accounting side of running a business can often become complicated, especially for new companies that are just starting out. That being said, it is important to remember that bookkeeping services and other accounting professionals can provide the necessary support to help business owners to keep on top of their finances.
Above all, all of these changes would mean that the state constitution, if amended, would prevent lawmakers from introducing any legislation to raise Tennessee’s income tax.
Tennessee is one of nine states that do not tax personal income and generally has the one of the lowest tax rates in the country, but this amendment would make the state the first to declare income tax unconsitutional.
Proponents of the amendment say that the state’s lack of income tax attracts businesses to the state and an outright prohibition of the tax will only make Tennessee more appealing in that regard. If this is to become the case, it may mean that the residents of Tennessee won’t need to have any income tax planning techniques in place as there is already a lack of income tax.
Other states aren’t so lucky, and so to help optimize any earnings, as well as reducing any taxes you have, people may want to have a look at somewhere similar to Tax Law Canada (https://taxlawcanada.com/individual-and-family-income-tax-planning/) to help them stay on top of the tax payments that they are required to make.
Raising Tennessee’s sales tax has long been the legislative solution to building revenue for an income-tax-averse government. State sales tax is the highest in the nation at seven percent. Depending on additional taxes from local municipalities, it can climb as high as 9.75 percent.
A vote for No on Amendment 3 will keep the Constitution as previously written, allowing for flexibility on any possible future income tax legislation.
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