News Summary
The Knoxville City Council has approved a half-percent sales tax increase proposal aimed at generating an additional $47 million annually for infrastructure improvements and community enhancements. If finalized, the tax rate would rise to 2.75% and fund various projects such as affordable housing, parks, and road paving. A second vote is scheduled for June 24 to determine eligibility for the November ballot.
Knoxville – The Knoxville City Council has voted 7-1, with one member abstaining, to approve the first reading of a proposed half-percent sales tax increase. This measure, put forth by Mayor Indya Kincannon, will be on the ballot for a Local Option Sales Tax referendum during the upcoming November elections.
If the tax increase is approved, the sales tax rate in Knoxville will rise from 2.25% to 2.75%, generating an estimated additional $47 million annually to improve the city’s quality of life and alleviate pressure on public infrastructure across all neighborhoods.
A second and final vote regarding the sales tax increase is scheduled for June 24. Approval of this final measure is critical for the proposal to qualify for the November ballot. The funds raised from this tax increment are intended to address several pressing infrastructure needs, as outlined by Mayor Kincannon, which includes a detailed allocation plan for the newly generated revenue.
Proposed Revenue Allocations
Under the proposed plan, the new revenue would be distributed into several categories, focusing on various community enhancements. The outlined allocations include:
- $10 million for affordable housing
- $12 million for greenways and road paving
- $5 million for facilities and maintenance
- $10 million for parks
- $10 million for sidewalks and traffic calming measures
Current Tax Landscape
Knoxville’s present total sales tax rate stands at 9.25%, comprising 7% allocated to the state and 2.25% to the city. Notably, the proposed increase will not be applied to groceries, which will continue to be taxed at their current local rate of 2.25% plus the 4% state grocery sales tax.
This increase is designed to align Knoxville’s sales tax rate more closely with those of neighboring counties, including Anderson, Blount, Grainger, Jefferson, and Sevier. City health officials anticipate that the bulk of the revenue will come from tourists and visitors rather than the city’s residents.
Council Discussion
The council’s deliberations included varying perspectives as members voiced their support or concerns regarding the proposal. Council members Gwen McKenzie and Seema Singh indicated their support for the tax increase while requesting further clarification on the agreements concerning spending. On the other hand, Council Member Amelia Parker opposed the proposal, citing worries about its regressive nature, which disproportionately burdens lower-income residents.
Infrastructure Goals
Mayor Kincannon highlighted that the primary intention of this tax increase is to expedite the completion of numerous backlogged infrastructure projects throughout the city. The potential passing of this increase will coincide with city council elections in November, providing residents an opportunity to choose their representatives while also considering the tax proposal.
The funds collected from the anticipated sales tax increase will be utilized within a Five-Year Neighborhood Investment Plan, which aims to fulfill project commitments outlined in the city’s infrastructure development framework. This initiative is expected to enhance the overall living conditions and amenities offered to Knoxville’s residents.
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Additional Resources
- Knox News: Tennessee Sales Tax Exemptions
- Google Search: Knoxville sales tax increase
- WATE: Knoxville Sales Tax Increase Projects
- Google Scholar: Knoxville infrastructure tax increase
- WBIR: Knoxville City Council Sales Tax Proposal
- Encyclopedia Britannica: Sales Tax
- Hoodline: Knoxville Voters and Sales Tax Increase
- Google News: Knoxville sales tax increase
