Issued December 28, 2007

For immediate release…

Spokespeople are available statewide. Contact the follow to arrange interviews:

• Bill Howell, TFT Nashville, 615-751-5011 (off) or 615-289-1397 (cell)
• Kimberly Douglass, TFT Knoxville, 865-687-9600 (off) or 865-705-9205 (cell)

Other contacts:

• Dick Williams, TFT Member, 615-886-4146
• Phil Schoggen, TFT Board Member, 615-356-2381

RING UP SOME CHANGE IN THE NEW YEAR

Tennessee Food Tax Cut Takes Effect January 1st

When the citizens of Tennessee ring up their purchases at the grocery store next Tuesday, “it will be a Happy New Year indeed,” says Phil Schoggen of Tennesseans for Fair Taxation (TFT). That’s because the state tax on food will be reduced by one-half percent, hailed by many as another step on the road to tax fairness.

Schoggen adds, “This victory, on top of the earlier victory in preventing the 2002 sales tax increase from being applied to grocery food, means that food is now taxed at a 1.5% lower rate than non-food items. That’s enough for every Tennessee family to buy another five-and-a-half days’ worth of groceries each year.”

During the 2007 legislative session, Tennesseans for Fair Taxation (TFT) won a reduction in the state food tax, paid for with part of the increase in the state cigarette tax. “The food-cigarette tax swap was a no brainer”, says Schoggen. Tennessee had the highest food tax in the country and one of the lowest cigarette taxes.

“This outcome was possible because key legislators in the General Assembly recognized the need for change; legislators from both sides of the aisle recognized the need for shared prosperity across this state”, says Schoggen.

Even with the recent victories, Tennessee’s food tax remains the third highest in the country. The remaining tax on food still represents 28 days’ worth of groceries each year for the average family. “The upcoming one-half percent food tax cut is a good first step, but one-half percent cuts are small steps in a long marathon”, says Dick Williams of TFT.

In the next leg of this marathon, TFT, along with its broad based coalition members, is proposing further reductions in the state food tax. In the 2008 legislation, TFT will propose paying for these reductions by closing tax loopholes that allow multi-state corporations to avoid paying the same business taxes that our homegrown businesses must pay. Says Williams, “Small businesses, from across the state, have already indicated their support for the Food and Business Tax Fairness Act”.

Momentum for closing corporate loopholes has been building nationwide. A total of 21 states have already passed “combined reporting” provisions to close corporate loopholes. In 2007 alone, three states, West Virginia, New York and Michigan, passed such legislation, closing an array of corporate loopholes in the process. In mid-December, a study commission recommended that the Massachusetts state legislature take similar steps.

As with similar campaigns in other states, the Tennessee legislative campaign seeks to correct a feature of the state law that makes it legal for corporations to avoid paying their fair share of taxes. The closing of corporate loopholes represents another opportunity for shared prosperity in Tennessee.

“With the recent food tax reductions, The Tennessee General Assembly has already established the principle that sales tax on groceries is unfair to hardworking Tennesseans,” says Williams. “Not only will this measure help working families put food on the table, it will also level the playing field for locally-owned businesses by ending tax breaks that are available only to big, multi-state corporations.”

In mid-January, TFT, its coalition members, and small businesses from across the state, will hold a statewide, multi-city, media kickoff to announce their plan to build on the success of 2007 with the Food and Business Tax Fairness Act. “January 1st will be a good day in Tennessee. We look forward to lots more good days like it,” adds Williams.

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