TBA Law Blog

TBA Law Blog

Professional Privilege Tax Update and Call to Action

Posted by: Kate Prince on Apr 19, 2022

With most legislative committees now closed, budget negotiations are ongoing from last weekend, and the state budget is expected to be released as early as tomorrow. After meeting with and educating legislators and the administration through the entire legislative session on the need to reduce or repeal the professional privilege tax, the TBA applauded Governor Lee’s proposal to reduce the tax by $100 in the previously released budget amendment, and we have continued to reach out to the Governor and House and Senate leadership to keep that reduction in the budget that is currently being negotiated. There are over 22,956 attorneys licensed to practice law in Tennessee; all of whom must pay the $400 professional privilege tax, regardless of their income, employment status or whether practicing law is their main profession. Eighty two percent of the lawyers who pay the professional privilege tax are Tennessee residents. We agree with Governor Lee when in his 2020 State of the State address, he called this tax “arbitrary and unfair,” and we will continue to push legislators to at the very least reduce this discriminatory tax.  Please take a second right now and reach out to your legislators and ask them to make sure the final version of the state budget includes the provision to reduce or eliminate the professional privilege tax.

Additionally, as you know, the Department of Revenue sent out the annual notice to all attorneys that they must pay the professional privilege tax today (talk about crazy timing).  Unfortunately, any changes made by the legislature to the professional privilege tax will not go into effect until next year; therefore, all attorneys are required to pay the professional privilege tax this year.

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