Insult to Tax Injury

Every year June 1 is a day that makes my blood boil. You see, the state’s fiscal year starts on July 1, so June 1 is the deadline they use to collect for some tax collections. I’m not going into income taxes versus sales taxes here. I’m talking about something very different. A tax that doesn’t apply to that many people, so the general public doesn’t care. Unless it’s to think that the people it does affect deserve to be taxed extra.

What I’m talking about is the professional privilege tax. The Tennessee Department of Revenue defines the privilege tax this way:

The professional privilege tax is levied on the privilege of having an active license to practice certain professions, businesses or occupations listed below:

You can see the full list of professions on their website. It includes accountants, brokers, chiropractors, doctors, lawyers and, of course, engineers.

The thing all the subject professions have in common…….. you have to obtain a special license to practice any of them in the state of Tennessee. Now I don’t have a problem with requiring a license for some things. I wouldn’t want my accountant designing a bridge I have to drive across, and I wouldn’t want any of my colleagues to do my taxes. But this is getting out of hand.

The state legislature first says you can’t practice without getting a license, which of course is provided by the state and not an independent party. But the license isn’t free. You have to pay annually or semi-annually to keep it. But not only do you have to pay for your license, you have to pay an annual tax on it. Essentially the legislature found out that they had a list of people that are hostage to them because they work in their chosen profession at the discretion of the state. So they decided to pick their pockets for an extra little something. They make you get a license, then they make you pay tax on the license to keep it. How can this not be illegal?

Not only does the whole scheme seem illegal to me, but it’s inconsistent as well. Teachers have to be licensed. Why don’t they have to pay the privilege tax? My guess is because they have a better lobby than the rest of us. From what I’ve heard, you don’t mess with the NEA.


Blogger Exador said...

Do you have to take some kind of test every year, to insure that you are qualified to practice your profession, and therefore worthy of a license?

If not, it's just a blatent screw-job.

1:05 PM, July 12, 2006  
Blogger W said...

Nope, no test. Every two years we have to pay our registration fees and certify that we've done a certain amount of continuing education. But the tax is all seperate from that.

It's definitely a blatant screw-job. This is Tennessee. Home of the 'illegal drug tax'.

2:15 PM, July 12, 2006  
Blogger Exador said...

At least you don't have a state income tax.

That's good, right?

How's TennCare coming along?


11:11 AM, July 15, 2006  

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