TBA Law Blog


Posted by: Julia Wilburn on Mar 22, 2024

A nearly $2 billion tax and refund for businesses passed the Senate on Thursday on a vote of 25-6, the Associated Press reports. “This bill will put this issue behind us and address it in a responsible way,” said Sen. Ken Yager, R-Kingston, adding that doing so could make the state more competitive in attracting businesses to move to Tennessee. At issue are concerns that the state’s franchise tax violates a U.S. Constitution’s Commerce Clause provision, which bans states from passing laws that burden interstate commerce. Further adding to the legal woes is a 2015 case involving the U.S. Supreme Court striking down down Maryland’s tax that the justices ruled had the effect of double-taxing income residents earn in other states. The proposal is designed to prevent threats of a potential lawsuit. Speaker Cameron Sexton, R-Crossville, told reporters that the House version will be different.