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HB 189

Taxes - As introduced, repeals the professional privilege tax for tax years that begin on and after June 1, 2026. - Amends TCA Title 67, Chapter 4, Part 17.

114th Regular Session (2025-2026) Introduced by Ron Gant

HB 189 repeals Tennessee's professional privilege tax starting June 2026, eliminating state revenue from business licensing fees on professional income.

Taken off notice for cal in s/c Finance, Ways, and Means Subcommittee of Finance, Ways, and Means Committee
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Bill Summary · HB 189

Legislative bill overview

HB 189 would eliminate Tennessee's professional privilege tax for all tax years beginning June 1, 2026 and beyond. This tax currently applies to certain professional businesses and generates state revenue through annual licensing fees based on gross income.

Why is this important

The professional privilege tax is a significant revenue source for Tennessee's general fund. Repealing it would reduce state tax collections, potentially requiring offsetting cuts to state services or alternative revenue sources, while providing tax relief to affected professional businesses such as law firms, medical practices, and accounting firms.

Potential points of contention

  • Revenue impact: The repeal eliminates an ongoing revenue stream without identified replacement funding, creating budget pressure in an era of competing fiscal priorities
  • Equity concerns: The tax affects only certain professionals and business types; repeal benefits specific industries while other businesses and individuals remain subject to different tax obligations
  • Timing and implementation: The June 1, 2026 effective date allows lead time but creates a compressed legislative window if offsetting measures are needed before implementation

Compiled from official sources — confirm details with the bill’s official record.

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