The Tennessee General
Assembly adjourned this week after approving a $33.8 billion budget and
debating hot-button issues including proposed healthcare, labor and tax reforms.
Small business again fared well overall but will be monitoring the impact of
several bills that passed and others that will be debated again in 2016.
listing of bills NFIB supported, opposed or tracked is available here.
Anti-Business Labor Agenda
vigorously opposed a series of unnecessary or harmful bills that would have
impacted your ability to own, operate and grow your business. Specifically:
bill that would initiate a study of a mandated paid leave program stayed
in committee, while a
similar measure to mandate time off for school visits failed. NFIB
argued against the measures, noting employers are meeting the needs of the
workforce through traditional leave and paid-time off programs and must
maintain flexibility to run their enterprises.
- Several attempts to enact a state
minimum wage failed in committee and on the House floor. NFIB and other
groups continue to argue the measures would hurt entry-level and lower
- A House subcommittee defeated the “Pay
Equality Act,” which would have enabled a state right of action on
gender pay discrimination claims. While asserting our members’ support of
“equal pay for equal work,” NFIB argued three federal laws already address
this issue and proponents’ statistics do not include the choices women
make in many circumstances.
- A bill to “ban
the box” was held by a House sponsor. The legislation seeks to
prohibit employers from asking an applicant’s criminal history on a first
interview or application. It is likely to be debated in 2016.
Workers’ Comp Alternative
Proposal to Return in 2016
that would establish an alternative workers’ compensation system as an ERISA
benefit advanced through a Senate committee, with no action taken on the House
Bill 721 by Sen. Mark Green (Clarksville) was amended after much discussion
and input, stopping just short of the Senate floor as session ended. NFIB remains
neutral on the bill, based on 2015 Member Ballot results, but worked with Sen.
Green, an NFIB member, and others to share opportunities to address several
concerns. The legislation will be taken up again next year.
is pleased that the workers’ comp reform effort from 2013 is bearing fruit,
with average rates dropping and early reports of less friction within the new
What’s on Tap?
will be watching for the return of several key bills, while assessing the
impact of several new laws, including:
Bill 603, the governor’s Revenue Modernization Act, passed
overwhelmingly in both chambers. The sweeping legislation: creates a
substantial nexus definition for out-of-state businesses, taxing those
that meet bright-line factors; establishes a market-based sourcing
standard for apportioning the franchise & excise (F&E) tax,
replacing cost of performance, for out-of-state domiciled companies; establishes
“triple weighting,” placing more emphasis on sales and less on payroll and
personal property, which will provide F&E tax relief for some larger
in-state businesses; enables sales & use tax to be collected on remotely
accessed computer software, while exempting software-based services “in
the cloud” used for information and data processing services; and
establishes a click-through nexus standard and threshold for dealers and
their customers. At NFIB’s request, a provision that would have given the
Commissioner of Revenue rulemaking authority to change the process of
collecting the F&E tax was removed. NFIB plans to engage the
administration, legislature and other groups to pass legislation that
would give businesses more flexibility in reporting the tax and decrease
the significant underpayment penalty.
- Insure Tennessee, the governor’s
Medicaid expansion proposal, failed in a special session in February and again
in April. NFIB was neutral on the effort, based on special survey
results from January; we remain opposed to traditional Medicaid expansion,
based on our 2013 Member Ballot.
effort to phase out the $400 professional privilege tax gained modest
momentum but still has several hurdles. Legislation
to restore vendors’ compensation was filed and will return in 2016.
- At NFIB’s request, a
requirement for employers with 10 employees or more to file quarterly
unemployment reports online was amended to enable employers with 10-99
employees to request relief from the new mandate. Employers with fewer
than 10 employees remain completely exempt.
that would establish an administrative system to review medical
malpractice claims is expected in 2016.
- A judge in Hamilton County has ruled
that Tennessee’s non-economic (pain and suffering) cap of $750,000 is
unconstitutional. NFIB and other business groups are monitoring and
discussing potential next steps.
Good News on Your Radar
to your NFIB membership, big benefits are in place or about to occur! Here’s a
- Full repeal of the state death tax
will finalize in 2016, a major win for thousands of NFIB members. Farmers
and multi-generational businesses will avoid a state tax of between 5.5
percent and 9.5 percent on their estates.
- Qualifying seasonal small business
owners will have potential relief from unemployment claims, beginning July
1, 2016. For more details read
here and watch for
notices from Tennessee’s Department of Labor & Workforce Development.
- The Unemployment Trust Fund remains
in better shape, with tax rates much lower than in years past, despite a
blip in January to a higher tax table. Unemployment claim processing is
improving, while fraud and abuse appears to be down, after several years
of uneven results.
- A 2011 state law continues to hold Tennessee
cities in check from passing various mandates – wage, wage theft, leave
contact State Director Jim Brown at 615-874-5288 or [email protected] with any comments or questions.