The most touted new law reduces the state sales and use tax rate on sales of food and food ingredients from 5.5 percent to 5.25 percent.
With the change, food and food ingredients will be subject to a reduced state sales and use tax rate of 5.25 percent plus the applicable local sales and use tax rate. Rutherford County’s – including all the cities – local option tax rate is 2.75 percent, meaning grocery buyers will pay 8 percent sales tax, saving the average shopper 50 cents on a $200 grocery bill.
“I’m trying to ensure we reduce the tax burden on working families and small business,” Rep. Joe Carr (R-Lascassas) said about the reduction in sales tax on food, along with the inheritance tax and gift tax repeals.
The General Assembly passed a law that will slowly pull back the inheritance tax over the next four years with an eventual repeal of all inheritance taxes in 2016.
Carr also co-sponsored a bill that repealed the gift tax retroactive to Jan. 1, 2012.
“We reduced taxes in three keys areas,” Carr said, adding the 2012 state budget has a projected $400 million surplus. “That’s what happened when you return tax money to the taxpayer.”
Aside from tackling taxes, the legislature also took aim at offenders who arrested on suspicion of driving under the influence, synthetic drugs, abortion, sex offenders, human trafficking and drug use by welfare recipients.
Some of the most publicized laws that took affect were directed at drug testing welfare recipients and reducing teen sex.
The drug-testing law requires the Tennessee Department of Human Services to “implement a program of suspicion-based drug testing” for applicants of temporary assistance for needy families.
Opponents of the measure, including the Tennessee Chapter of the American Civil Liberties Union, argued against the law because it could violate the U.S. Constitution by violating an individual’s right to privacy and cost the state money to implement.
“(The law) raises a number of serious constitutional concerns and risks wasting precious taxpayer dollars in a time of economic turmoil to address a nonexistent problem,” Tennessee ACLU Executive Director Hedy Weinberg wrote in a letter to Gov. Bill Haslam.
Haslam expressed concerns after Tennessee Attorney General Robert Cooper wrote two opinions questioning the constitutionality of the bill, but then it was rewritten to make it suspicion based and not across the board testing.
“Before there were some questions. Now ... it’s all suspicion based, which is what they’ve said is constitutional,” Sen. Stacy Campfield (R-Knoxville) said.
The drug-testing program is expected to cost $200,000 per year to administer.
In other, less publicized, laws, lawmakers expanded the definition of drugs classified as synthetic drugs, the production, manufacture, possession and sale of which is illegal in Tennessee.