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1993 Tennessee Attorney General Reports and Opinions 1 (1993)

handle is hein.sag/sagtn0133 and id is 1 raw text is: OPINIONS OF THE ATTORNEY GENERAL OF TENNESSEE Published by Authority of Chapter 276 Public Acts of 1971 June & July, 1993 93-48 CONSTITUTIONAL LAM/TENESSEE/Taxation: A city may not enact a payroll.tax without the authorization of the General Assembly; no local tax is valid unless authorized by the Legislature. A home rule municipality does not have the authority to enact a payroll, income, or privilege tax. Article XI, Section 9 of the Tennessee Constitution provides that the power of taxation of a home rule municipality shall not be increased except by general act of the General Assembly. A payroll tax, the incidence of which is imposed on employers, would not likely be considered an income tax. A tax imposed directly on those earning salary or wages and based on a percentage of their earnings might be considered an income tax. An ordinance passed by the city council of Memphis creating a payroll tax for all persons employed within the City would not be constitutional. Since Memphis has adopted home rule, it could be authorized to levy a payroll tax only by general act of the Legislature. Memphis does have broad authority to tax privileges pursuant to acts of the Legislature passed before adoption of home rule, but the Legislature has not declared or defined any privilege that would support imposition of a payroll tax. The Memphis City Council does not have the authority to assess and enforce a proposed Occupational Privilege Tax under its charter. The proposed Occupational Privilege Tax lacks the necessary authorization by the General Assembly, since the privilege it purports to tax has not been declared or defined by state law, and since no general authority has been delegated to cities to levy such a tax. Moreover, the proposed tax would fall directly on employees and wage-earners and might be characterized as a species of income and might be unconstitutional with respect to income taxation. The proposed tax might also be viewed as a municipal tax on incomes expressly prohibited by Article XI, section 9, paragraph 8. Tenn. Const. Art. II, 28-29, Art. XI, §9; T.C.A. §67-4-708-709, §67-4-1701; Op. Tenn. Atty. Gen. 81-281 (September 2, 1981), Op. Tenn. Atty. Gen. U84-004 (February 1, 1984), Op. Tenn. Atty. Gen. 85-55 (March 1, 1985), Op. Tenn. Atty. Gen. 85-124 (April 18, 1985), Op. Tenn. Atty. Gen. 85-216 (July 24, 1985), Op, Tenn. Atty. Gen. U86-39 (March 5, 1986), Op. Tenn. Atty. Gen. 88-108 (June 1, 1988), Op. Tenn. Atty. Gen. U92-49

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