|By Tom Humphrey, The Knoxville
News-Sentinel, Tenn.McClatchy-Tribune Regional News
May 16, 2010 --NASHVILLE -- Even in a time of state budget problems, legislators have ideas for tax breaks for those suffering damage from natural disasters, be they big corporations or individual families.
The Senate Finance Committee approved Thursday a proposal that could give Nashville's posh Opryland Hotel a state tax break as it repairs damage from recent flooding.
The measure that could benefit Opryland was proposed as an amendment to the "technical corrections" bill sponsored by Senate Democratic Leader Jim Kyle of Memphis and approved Thursday by the Senate Finance Committee. The bill includes numerous changes to the state's tax code, including several revenue-generating proposals that the governor wanted but the Republican-controlled committee rejected.
As explained by Revenue Commissioner Reagan Farr, the amendment basically would extend a tax break now available to businesses building a major facility in Tennessee to major businesses that suffer damage in a disaster and have to rebuild. As written, the provision would apply only to a business that has at least $50 million in damages. Flood damage to the Opryland Hotel roughly has been estimated at between $50 million and $100 million.
Under the plan, state sales tax on purchases of building supplies, equipment and such needed for repairs would be reduced from 7 percent to 0.5 percent. Local sales taxes, which can run up to 2.75 percent, would not be affected. The standard state rate is 7 percent, with 0.5 percent earmarked for education. The latter is the 0.5 percent that would remain to be charged.
House Democratic Leader Gary Odom of Nashville, meanwhile, proposed Friday to eliminate the state sales and local sales taxes on building materials and appliances purchased by homeowners who have qualified for federal disaster assistance. The tax break, which would be in effect from passage of the legislation until Sept. 1, will be offered as an amendment to the "technical corrections" bill in the House Finance Committee, according to an Odom spokesman.
"It is the least we can do to help our neighbors and friends get back on their feet," Odom said.
The measure would not have a negative effect on the budget because the sales tax collected on appliances and building materials bought by flooding victims would not have been collected in the first place if it weren't for the recent disaster, Odom said. Similar arguments were offered on the Senate side in supporting the Opryland amendment.
Tom Humphrey may be reached at 615-242-7782.
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