Cole thinks sales tax increase will be detrimental to county

The 2002-2003 state budget passed by the Tennessee General Assembly increased the state sales tax rate from 6% to 7%. With local option sales tax, rates will rise to the following levels in the following cities and counties:

Carter County 9.25%
Elizabethton 9.25%

Greene County 9.75%
Greeneville 9.75%

Hancock County 9.00%
Bulls Gap 9.75%

Hawkins County 9.75%
Rogersville 9.75%

Johnson County 8.50%
Mountain City 9.50%

Sullivan County 9.25%
Bristol 9.25%

Washinton County 9.50%
Johnson City 9.50%

Unicoi County 9.75%
Erwin 9.75%

 The city of Kingsport is located in Hawkins and Sullivan County. Kingsport residents of Hawkins Co., will pay 9.75% sales tax while Sullivan Co., residents will pay 9.50% in sales tax.

By Julie Fann
Star Staff
jfann@starhq.com

  
In a phone interview conducted Friday, Rep. Ralph Cole, R-Elizabethton, said the increase in the sales tax approved by the Legislature on Wednesday will be bad for the people of Carter County. Rep. Cole has opposed any increase in the sales tax throughout the recent legislative sessions.
   On Wednesday, the House approved the new sales tax measure by a vote of 50-41. Rep. Cole abstained on that vote.
   "I worked for four years to get the sales tax removed from food, and the past two years I've added trying to get the sales tax removed from non-prescription drugs and clothing, which are necessities. Therefore, I could not bring myself to vote when the revenue plan passed," Cole said.
   The new sales tax plan, sponsored by Sen. Jerry Cooper, D-Morrison, raises the state sales tax rate from 6 percent to 7 percent on everything except food, and increases levies on businesses, alcohol and tobacco products.
   "The sales tax vote raised taxes on every man, woman and child in Carter County. Carter Countians will now pay 9.25 percent on all items besides groceries. The tax is unfair to working men and women, middle income families, and the poor," Cole said.
   When the tax goes into effect July 15, Tennessee will have one of the highest sales tax rates in the country -- 9 percent or higher across most counties - and the largest tax increase in history -- $933 million. The House narrowly approved the bill 50-41 last week, the minimum number of votes required for passage. The Senate approved the bill 22-11.
   Cole said he supported a 3.75 percent flat income tax which would be paid largely by the urban rich in Middle Tennessee.
   "Now, a man in Carter County making only $20,000 a year will pay just as much on this tax plan as a man in Middle Tennessee making $150,000, and, in my opinion, that just isn't fair," he said.
   The new tax plan also raises the professional privilege tax from $200 to $400 on certain businesses such as mechanics, architects, physicians, and lawyers. According to Cole, that increase amounts to a 100 percent income tax on a select few.
   Cole said he was supportive of the tax plan President Bush has touted since the recession, one that he said would do more for small business. But the tax plan the state passed raises the excise tax from 6 to 6.5 percent. "Small business is already having a tough time, and I couldn't justify voting for the legislation."
   Cole said it was obvious that the new tax plan would only be a two-year temporary fix and that whoever is elected governor will be faced with the issue of resolving the situation again.
   "Within two years those individuals running for governor who claim to be such great managers are going to have the opportunity of doing that, but my personal opinion is they'll be trying to raise taxes. I say this strongly. How far can you raise the sales tax? Tennessee needs a fair revenue system that treats everyone the same," he said.
   The new sales tax plan allows local governments to continue to add up to 2.75 percent to the state sales tax. Only four of the state's 95 counties will pay less than 9 percent sales tax; 30 counties will pay the maximum 9.75 percent.