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NewsTracker Tax and Budget

Niceley Proposes Sales-Tax Holiday for Guns, Ammo

In light of rising hunting-license fees and soaring ammunition costs, a rural East Tennessee state senator wants to give hunters a break on their supplies similar to what families get each year on back-to-school goods.

“I just thought maybe the sportsmen need a break, let’s see what it’s going to cost,” state Sen. Frank Niceley, a Strawberry Plains Republican and farmer, told TNReport last week.

Niceley pointed to the sales tax holiday the state currently grants to families of students on the first weekend in August each year, and said his proposal is “just a little something to jump-start the sports world.”

He added similar proposals in Louisiana and Mississippi have worked well and are “very popular.”

Niceley said he wanted to give Volunteer State sportsmen a break due to rising ammunition costs and the Tennessee Wildlife Resources Agency’s recently proposed increase in what he thinks are already expensive hunting licenses.

In mid-January the state Fish & Wildlife Commission approved a 22 percent increase in licensing fees, raising the Type 1 resident hunting and fishing license from $27 to $33, and the annual sportsman license from $135 to $165. The new fees will go into effect on July 1.

Under the legislation, SB0206, purchases of firearms, ammunition and “hunting supplies” — defined as “archery equipment, firearm and archery cases, firearm and archery accessories, hearing protection, holsters, belts and slings” — would be exempt from having sales tax levied on it. “The Second Amendment Sales Tax Holiday” would take place the first weekend of September.

The proposal also requires the state to reimburse local governments for any losses incurred as a result of the exemptions.

Niceley framed his legislation as another in a line of tax cuts since the GOP took control of the General Assembly several years back, such as the reducing the grocery tax and Hall Income Tax, as well as abolishing the state’s inheritance and gift taxes. “That’s what Republicans do. Republicans cut taxes,” he said.

However, Niceley also admitted if the bill has “too big a fiscal note” then he “obviously won’t be able to get it passed.”

The bill currently has no House sponsor.

Categories
Press Releases

TN Sales Tax Holiday Scheduled for August 2-4

Press release from the Tennessee Department of Revenue; July 17, 2013:

Nashville, Tenn. – The Department of Revenue is reminding Tennesseans that the seventh annual Sales Tax Holiday is scheduled for Friday, August 2 through Sunday, August 4. During these three days Tennessee shoppers can save nearly 10 percent on tax-free clothing, school and art supplies, and computer purchases.

“I want to encourage Tennessee families to take advantage of the Sales Tax Holiday because it was created with them in mind,” Gov. Bill Haslam said. “The weekend provides savings for families, especially as students are starting the new school year, and the holiday can provide relief on clothing, school and art supplies and computer purchases.”

The holiday begins Friday, August 2 at 12:01 a.m. and ends Sunday, August 4 at 11:59 p.m. During the designated three-day weekend, consumers will not pay state or local sales tax on clothing with a price of $100 or less per item, school and art supplies with a price of $100 or less per item, and computers with a price of $1,500 or less.

“As in years past, last year’s tax-free weekend was very successful, providing Tennessee taxpayers over $10 million in tax savings” said Revenue Commissioner Richard H. Roberts. “We are hopeful that Tennessee shoppers will again take advantage of the tax relief provided by the 2013 Sales Tax Holiday.”

Please visit the Sales Tax Holiday Web site at www.tntaxholiday.com to learn more about the items exempt from sales tax. The Tennessee Department of Revenue also assists consumers via e-mail, Salestax.Holiday@TN.gov, and through its toll-free statewide telephone hot line, (800) 342-1003. Staff is available to answer questions Monday through Friday 7 a.m. to 5 p.m. Central Time. (Out-of-state and Nashville-area callers, please dial (615) 253-0600.)

Examples of exempt items include:

  • Clothing: Shirts, dresses, pants, coats, gloves and mittens, hats and caps, hosiery, neckties, belts, sneakers, shoes, uniforms whether athletic or non-athletic and scarves
  • School Supplies: Binders, book bags, calculators, tape, chalk, crayons, erasers, folders, glue, pens, pencils, lunch boxes, notebooks, paper, rulers and scissors
  • Art Supplies: Clay and glazes; acrylic, tempera and oil paints; paintbrushes for artwork; sketch and drawing pads; and watercolors
  • Computers: Central processing unit (CPU), along with various other components including monitor, keyboard, mouse, cables to connect components and preloaded software (Note: While the CPU may be purchased separately, other items must be part of a bundled computer package in order to be eligible.) iPads and other tablet computers are eligible for tax exemption, while smart phones and video game consoles are not.

The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws established by the legislature and the collection of taxes and fees associated with those laws. The Department of Revenue collects approximately 87 percent of total state tax revenue. During the 2012 fiscal year, the department collected $11.3 billion in state taxes and fees. In addition to collecting state taxes, the Department of Revenue collects taxes for local, county and municipal governments. During the 2012 fiscal year, local government collections by the Department of Revenue exceeded $2.0 billion in local taxes and fees. In collecting taxes, the department enforces the revenue laws fairly and impartially in an effort to encourage voluntary taxpayer compliance. The department also apportions revenue collections for distribution to the various state funds and local units of government. To learn more about the department, log on to www.TN.gov/revenue.

Categories
Business and Economy Tax and Budget Transparency and Elections

Amazon’s Tax Treatment Draws Barbs from Women’s Business Group

Advocates for small retail businesses say instead of focusing on big splashy job creation announcements, Tennessee policymakers should wake up to potential job losses resulting from those splashes.

As Tennessee launched its latest back-to-school sales tax holiday for the weekend, the president of a national nonpartisan group supporting women-owned businesses and a Tennessee small business owner held a teleconference Friday trying to draw attention to the adverse impact of e-commerce on the state.

Barbara Kasoff, president of Women Impacting Public Policy, and Maggie Jetter, owner of the Tweed Baby Outfitters store in Nashville, made their pitch for economic fairness and fielded questions from reporters Friday about the sales tax holiday. The looming figure in the discussion was Amazon.com.

Amazon has become a white knight in the eyes of people trying to create lots of jobs in a short amount of time, with the online retail giant recently launching three large distribution centers in the state, and the possibility of even more. But at least some small businesses don’t see Amazon that way.

“I know they’re speaking about creating 1,500 new jobs, but you also have to keep in mind that with Amazon bringing a large company to Tennessee that’s not paying sales tax, you’re definitely coming close to putting out a lot of small businesses and losing even more than 1,500 jobs,” Jetter said.

Jetter and Kasoff offered no numbers in Friday’s conference call to back up the claim that job losses match the job gains, but Kasoff said small businesses create 93 percent of all new jobs.

“If small business retailers such as Maggie are not able to add jobs, that’s going to have a far-reaching and very significant impact on the economy,” Kasoff said.

Small retail advocates say it’s not simply that the brick-and-mortar stores are losing business to big online retailers but that losses in small businesses can hurt an entire community. When online retailers are exempt from collecting sales taxes, it puts a dent in the revenue streams for small governments and by extension, the services they provide.

Jetter said she can literally see the impact of online retailers on her store, which carries apparel for children, diaper bags and other baby products. She sees people come in so they can look, touch and feel the merchandise, then exit to go buy it online with no sales tax.

“I see it especially with this generation of parents,” she said. “A lot of the grandparents do shop here, but a lot of parents have all the online blogs and websites to find their deals, to register on Amazon, to get their diaper bags on there, which are one of our higher-priced items, which helps us pay the rent.”

Jetter said she is aware of Tennessee Gov. Bill Haslam’s offer to lead the call for national action urging Congress to level the playing field for states. But Kasoff was asked if it’s realistic to believe Congress would act to force handing over more taxes.

“Now that the (debt-reduction) votes of the past week are behind us, we hope that focus is going to be on building economic stability,” Kasoff said. “I think they’re going to take a hard look at this. I think the state legislatures across the country are going to be taking a hard look.

“We have to stabilize the economy. We have to bring some sense of stability and confidence back to consumers.”

Kasoff said sales tax holidays are an example of putting small retailers on a level playing field. While there is constant debate as to whether people are boosting business or simply shifting the timing of their purchases, Jetter said she definitely expected to see more business because of the brief sales tax break.

“This is just our second year as a brick-and-mortar store, but I do expect to see a lot of families here,” Jetter said. “I expect to see a good 10 to 20 percent more shopping because of tax-free items.”

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