The IMPROVE Act



The Largest Tax Cut in Tennessee History



Tennessee's Plan to Fund Highways, Return the Budget Surplus

Through Tax Offsets that Save Tennessean's Money.





What is the improve act



The Improve Act is Governor Haslam’s plan to provide funding for Tennessee’s huge backlog of road projects. There are 962 projects in all, totaling over $10.5 billion.


Nine of the projects in the Improve Act are in Wilson County, totaling over $250 million.



the improve act is a tax cut



Experts like the conservative organization, Americans for Tax Reform, states that the IMPROVE Act as a tax cut.


ATR states that realignments of tax rates are a fair way to benefit citizens and accomplish goals. ATR's statement explains that the tax reductions in the IMPROVE Act offset the increases to produce a huge net tax reduction for Tennesseans.


"The IMPROVE Act is a tax cut." ATR



How does the improve act work



The bill restructures tax rates - simultaneously cutting General Fund rates to provide huge tax cuts and raising Highway Fund rates half as much to provide more funding for our roads.


The bill cuts the food tax by 20%, eliminate the Hall Income tax, provides low income seniors and disabled veterans property tax relief and cuts the franchise and excise tax for factories whilst providing additional funding to build roads by redirecting the surplus to the Highway Fund by adjusting tax rates.



How much does the improve act reduce taxes



The Improve Act lowers taxes by twice as much as they are raised approximately $250 million of dollars. The final bill is more than revenue neutral - for most Tennesseans - it is a tax cut. .State tax collections are reduced due to returning of the surplus.



What Are the reductions and increases



General Fund Tax Cuts = FY17 $293 million or $510 million at full implementation.
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.Sales tax on food is cut 20% total $125 million.

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Hall Income Tax is cut 20% in FY17, $55 million, and FY18, $217 million.

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Franchise and Excise Taxes cut for factories total $113 million.

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Disabled Veterans and Seniors Property Tax Relief $8 million

(restored to $175,000 of home value and no income limit)

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Highway Fund Increases = $215 million in FY18When fully implemented $250 million.Gas tax rises in stages - FY18, 4 cents, $133 million FY19, 1 cent, $35 million | FY20, 1 cent, $35 million(1/3 of the gas tax is paid for by out of state tourists and travelers).
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Diesel tax in stages - FY18, 4 cents, $43 millionFY19, 3 cents, $32 million | FY20, 3 cents, $32 million(1/2 of the diesel tax is paid for by out of state truckers.).
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Vehicle Registration Tax – Cars $5.00 totaling $34 millionElectric cars $100.00 totaling | Total $250K.
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Hydrogen gas in stages - FY 18, 3 cents, $341 KFY 19, 2 cents, $227 K | FY 20, 3 cents, $341 K.



Won't the diesel tax increase the cost of all goods at the store



The University of Tennessee was asked to determine how the diesel tax would affect trucking. The result was that the increase in the diesel tax will raise the cost of transporting goods to market by .0004 cents per $100 of value on a truck. Therefore
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If an item costs $100 IMPROVE adds .0004 cents to the price.
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If an item costs $1.00 IMPROVE adds .000004 cents to the price.


won't the gas tax be brutal as the price of gas increases



No. The gas tax is unaffected by inflation because the tax is on each gallon not on the price. If the price of gas fluctuates due to political crisis, demand or seasonal formulations, the amount of tax on a gallon of gas does not change.

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So, if you buy a gallon of gas at a $1 per gallon, the tax is .25 cents.

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If you buy 1 gallon of gas at $3 per gallon,the tax is .25 cents.

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The tax is on a gallon not by the price.



How much more do we pay
as the price of gas changes



The chart below is the price of gas each week for the last year, and shows how as the price of gas fluctuates, the amount of tax per gallon does not change.

The tax is .04 cents per gallon no matter the price.





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