Tax Relief, Labor Protections Highlight 2021 Session for Small Business

Date: May 06, 2021

In a year unlike any other, small businesses will walk away with an impressive scorecard from the first year of the 112th Tennessee General Assembly, which adjourned after 9 p.m. Wednesday, May 5. Thank you to the hundreds of NFIB members who called and emailed their legislators this year. It makes a tremendous difference. 

Right-to-Work Amendment Heads to Voters 

SJR 2 passed the House and Senate by the required two-thirds’ majority, so it will head to the 2022 Ballot, likely as Amendment 1SJR 2/HJR 72 was sponsored by Sen. Brian Kelsey and Rep. Chris Todd. 

“Our right-to-work law, in place since 1947, unfortunately, is under attack in Congress with the U.S. House’s recent passage of the PRO Act,” State Director Jim Brown said. Right-to-work simply states that workers have a choice if they want to join a union or not. NFIB members across Tennessee believe workers should have that choice, and now Tennessee voters will be able to vote on adding this important constitutional protection in 2022.” 

Business Fairness Act Passes 

Many small businesses were surprised to be closed during the pandemic while big box businesses selling the same products were deemed essential and allowed to stay open.  That won’t happen again in Tennessee with the unanimous passage of SB 474/HB 855, the Tennessee Business Fairness Act. The legislation states if you follow any health guidelines, state or local, your business can stay open. 

NFIB Legislative Tax Priorities Approved 

Gov. Bill Lee signed SB0775/HB0776, legislation that will exempt COVID-19 relief payments received between March 1, 2020, and December 31, 2021, from the Tennessee excise tax. Many NFIB members took advantage of the Tennessee Business Relief and Supplemental Employer Recovery Grant (SERG) programs, but legislation was needed to protect them from a surprise tax from relief payments during the pandemic. A decoupling bill passed in 2019 already protected PPPL recipients from tax implications. 

Early in the session, both chambers passed HB 38/SB 1274, which establishes new protections for taxpayers relying on guidance issued by the Department of Revenue. The bill was an NFIB priority to ensure small businesses receive dependable guidance and are better able to contest disputed findings during state audits. 

Small Business Supported by Unemployment Reforms  

Recognizing the severe labor shortage impacting many NFIB members, NFIB worked diligently on multiple fronts to protect small business. Specifically, we successfully supported: 

  • Nearly $1 billion in stimulus dollars directed to the UI Trust Fund, saving small businesses from tax increases of 300% or more. 
  • An executive order and later legislation that allowed the Commissioner of Labor & Workforce Development to “non-charge” employer accounts because of layoffs during COVID-19. 
  • A modernization bill, HB 1039/SB 1402that will help our UI program promote transitions back to work sooner, while helping more unemployed Tennesseans receive between $200/month and $100/month more, based on eligibility requirements. This indexing bill will be positive to the trust fund ($17M/year), which will help to ensure it remains solvent and make it less likely that TN would have to borrow from the federal government in future downturns.  
  • Establishment of a refusal to work form for employers wanting to report individuals who don’t show for job interviews 

Labor Mandate Bills Die, Positive Reforms Pass 

NFIB successfully opposed more than a dozen labor mandate proposals (minimum wage, paid family leaveonerous equal pay program and others). Of note, SB 379/HB 1282 would have deleted the prohibition on local governments mandating that employers who do business with the local government maintain certain sick and family leave policies and provide health insurance benefits. NFIB believes local governments should not be dictating employer policies as a condition of doing business.   

Several labor reform bills helping small business passed, including: 

  • SB 1150/HB 1112 prohibits local government entities from requiring a prime or subcontractor, as part of a contract to improve real property, to adhere to safety and health standards in excess of those required under OSHA and TOSHA rules. Robust OSHA and TOSHA standards already exist to protect workers’ safety, and any alleged violations should be reported immediately through current channels, not through new local government schemes that would lead to patchwork standards across the state.  
  • SB 1577/HB 1285 seeks to enhance ways in which Tennessee can address the problem of employee misclassification, where workers are not covered by workers’ comp and employers who cover their workers are an unlevel playing field when submitting job bids against non-compliant competitors. It gives the Bureau of Workers’ Compensation subpoena authority, which has a three-year sunset provision. 
  • SB 1567/HB 943 clarifies that an employment retaliation claim for complaining about discrimination or harassment can only be brought under the Tennessee Human Rights Act, eliminating the possibility of plaintiffs bringing duplicate claims against an employer under the same set of facts. 

Professional ‘Privilege’ Tax Remains 

NFIB was disappointed that lawmakers left Nashville without addressing the discriminatory professional “privilege” tax. Tennessee is one of only a handful of states that has this annual tax of $400, which is levied on seven professions, including attorneys, doctors and brokers 

NFIB and coalition partners believe it is a RIGHT, not a privilege to do business, and no one should be taxed to go to work. Some lawmakers are eager to eliminate this tax next year, but they must hear from you over the summer and fall. 

Looking to 2022 

NFIB expects debates to continue next year on data privacytaxation of bottlespaying out accrued vacationtangible personal property tax reform, voluntary shared work unemployment benefitsand more.  

Related Content: Victories | State | Tennessee

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