Image Credit: John Partipilo/Tennessee Lookout
***Note from The Tennessee Conservative – this article posted here for informational purposes only.
By Sam Stockard [Tennessee Lookout -CC BY-NC-ND 4.0] –
Tennessee House Republican leaders aren’t endorsing the revival of legislation providing a $20 million tax break to FedEx, despite a billion-dollar-plus investment planned in Memphis.
Rep. Mark White, an East Memphis Republican, hopes to return House Bill 1978 to the House floor for another vote after it failed 37-45 two weeks ago when critics of the bill cast it as “corporate welfare.” Because it didn’t receive 50 no votes, the bill can be reconsidered.
But with the legislature expected to wrap up the two-year session in less than two weeks, the measure hasn’t gone back before the Calendar and Rules Committee to decide whether it should receive another floor vote. It would require a two-thirds vote of the 18-member panel to return.
“So as you’re looking at the clock ticking, it’s not looking great for it to come back this year, at this point,” House Speaker Cameron Sexton said last week.
The measure would provide FedEx an exemption from sales taxes as it moves forward with a $1.4 billion hub project in Shelby County. White said the $89 billion company could undertake the same project in Indiana but that FedEx officials would rather upgrade in Memphis.
“I just think it’s a wise investment if they’re going to continue to invest billions in our community and our state,” he said, adding that FedEx has received such an exemption since 2019. The bill would affect sales taxes on building materials over six years.
Rep. Ryan Williams, a Cookeville Republican, was among those calling the bill “corporate welfare” before the House’s initial vote. He said last week he still couldn’t support the bill in its current form.
“It’ll be interesting to see what happens in Calendar and Rules if he can actually get it back to the floor,” Williams said.
White told the Lookout he planned to talk to House leaders about resurrecting the bill. Sexton and House Majority Leader William Lamberth declined to say they support bringing it back a second time this session.
Lamberth, who voted for the bill on the House floor, said those affected by the bill haven’t done a “great job” of articulating their growth plan. Lamberth pointed out the $20 million would be in the form of foregone sales tax revenue but added he would like to see the measure help multiple companies.
Sexton said he was uncertain whether the entire Shelby County legislative delegation will keep pushing the bill, or even whether FedEx wants to work toward another vote.
“They’re probably trying to gauge the lay of the land” to determine whether it has enough support, Sexton said.
The shipping company, which is one of the state’s top political spenders, has been one of the legislature’s top beneficiaries on sales tax exemptions over the years. It saved more than $186 million on jet fuel since 2016 after lawmakers capped its bill.
The legislature carved out an exemption for sales taxes on construction materials that saved it $21.3 million in 2019. The company and multiple subsidiaries also netted rebates and breaks on the state’s business taxes two years ago.
