Senate leadership introduces sales tax legislation

By Megan R. Harrell
Star Staff

   Republican and Democratic state Senate leaders have introduced legislation that has the potential to raise Tennessee's sales tax to seven percent. Rep. Ralph Cole (R-Elizabethton) is afraid that the senators' proposal will result in the people of Carter County having to pay over nine percent in sales taxes on groceries and other items.
   The legislation was heard by the Senate Finance Committee this week and could create a three percent tax on services rendered by a physician, lawyer, architect, barber, advertising agency, and all other services that are not currently taxed.
   The House Budget Committee is expected to stop the Senate's proposal before it is passed into law. The committee is comprised of nine individuals from the Northwestern and Northeastern portions of Tennessee. Rep. Cole is one of the nine that serves on the committee. "This form of taxation places is unfair to Northeastern and Northwestern Tennessee, and results in the people in Middle Tennessee paying a smaller percentage on their income for state taxes," Rep. Cole said. "I am confident that the House Budget Committee of will not let this legislation pass."
   Representatives from middle Tennessee hope to see a sales tax or a state property tax passed into law, but Rep. Cole and his constituents from Northwestern and Northeastern Tennessee plan to stand in their way.
   Sen. Douglas Henry has already proposed two state property taxes. Members of the house have stated that they will not allow any such tax to be passed.
   Last week, Gov. Sundquist put his proposal for a flat income tax of 3.25 percent on the table. Rep. Zane Whitson (R- Unicoi County), who serves on the House Budget Committee with Rep. Cole, sponsored the governor's tax bill in the House. The governor's plan calls for a removal of sales taxes on groceries, non-prescription drugs, and a removal of the six percent Hall Income Tax, and lowers the overall sales tax to 5.5 percent.
   Rep. Cole has asked Dr. Harry Green, Director of Tennessee Advisory Commission on Governmental Affairs, to conduct an analysis on the effects the governor's proposed legislation. Rep. Cole expects the analysis to show that 80 percent or more of the people in Carter County will end up paying less in taxes under the governor's plan.
   Rep. Cole's game plan in the mean time is to vote no on any legislation that does not remove sales taxes. "I certainly will not support a sales tax increase because that will increase taxes on every man, woman and child in Carter County," Rep. Cole said. "I was elected by the people of Carter County not the people of Middle Tennessee."