There is NO language in the Tennessee State Constitution that prohibits an income tax!!!

Persons using the "unconstitutional" excuse do so based on a 1932 State Supreme Court ruling (Evans vs. McCabe) that has not been revisited since 1964 (Gallagher vs. Butler), almost forty years ago. The 1932 Court was only able to reach such a conclusion by exercising an extremely liberal interpretation of the language of Article II, Sec. 28 adopted in 1870 that states:

"The legislature shall have power to levy a tax upon income derived from stocks and bonds that are not taxed ad valorem."

The provision simply states that what has now become known as the Hall Tax is an acceptable means of taxation. Persons who argue that an income tax is unconstitutional claim, on VERY shaky legal grounds, that if they meant to include a tax on earned income, they would have said it. This concept is often referred to as the "theory of omission".

Clearly there is no language that specifically prohibits any kind of state tax based on income which is why the last three Attorney General's have all said that, properly worded, an income tax IS constitutional.

The current State Attorney General Summers, and his two predecessors, have ALL opined that an income tax IS constitutional.

1. The first of these opinions came from the Office of Attorney General William Leech in response to a question from then Representative, now Senator Randy McNally on September 2, 1981.
2. The second of these opinions came from the Office of Attorney General Charles W. Burson, also in response to a question from Senator Randy McNally on June 10, 1991.
3. The third came from the Office of Attorney General Paul Summers (the current Attorney General) in response to a question from Comptroller of the Treasury John Morgan and State Treasurer Steve Adams on October 28, 1999. Click here to view AG opinion.

So what does the Attorney General's opinion mean?

The Attorney General is appointed by the Tennessee Supreme Court. Among other duties, the State Attorney General is charged with providing legal advice to state departments, agencies and the General Assembly and with rendering legal opinions to state officials upon request. It is highly unlikely that the justices would appoint any individual who held a fundamentally different viewpoint of the interpretation of the Tennessee Constitution.

Even anti-income tax talk radio host, Phil Valentine, admits that an income tax would be found constitutional. In an email to his followers dated June 29th, he wrote, "Understand that our sources tell us that the State Supreme Court is supposedly ready to rule that the income tax is constitutional."

Is it a 'Privilege' to Eat?

The anti-tax reformers argue that there is no language in the Constitution that authorizes a state income tax. But by the same token, their is no language that specifically prohibits a state income tax either. The truth is, the constitution is basically silent on the matter.

In order to enact taxes that are not specifically authorized nor prohibited in the state constitution, legislators usually define the tax as a 'privilege' tax, a legal catch all term. As a result, any state income tax enacted in Tennessee will likely be called a 'privilege' tax in the legal code. The opposition to tax reform has seized upon this term in their arguments against an income tax stating "Oh, is it a privilege to make money?"

However, if the anti-tax reformers are really so offended by the use of the term, perhaps they should ask themselves, "Is it a privilege to eat?" For those who don't know, the sales tax, including the tax on food, is enacted legally as a 'privilege' tax. So when you go to the grocery store, you're essentially paying for the 'privilege' of buying food. So, is it a privilege to eat? Of course not!

Before the hate radio groupies get too bent out of shape over the income tax being called a 'privilege' tax, they should read the constitution in its entirety. Perhaps they'll discover the inconsistencies in their own arguments.