State Legislature Repeals Professional Privilege Tax for Architects


In 2020, architects will no longer be subject to the $400 annual professional privilege tax!

(NOTE: Licensed architects in TN must still pay the professional privilege tax this year.)

 

The repeal of this $400 tax affects all our 1,400 members – even those that aren’t licensed yet because they will not worry about paying it in the future – saving ALL architects licensed in TN (including non-AIA members) money!

The repeal is effective in 2020, so licensed architects in Tennessee will have to pay one last time by May 31st of this year.  Please see the message below from AIA Tennessee’s president, Josh Flowers, FAIA. 


President’s Message

AIA Tennessee Members,

I am pleased to share with you that the professional privilege tax of architects in Tennessee has been repealed. As many of you know, this tax was enacted eighteen years ago as a result of intense negotiation involving AIA Tennessee members and advocates and was reached as a compromise to avoid more severe tax burdens impacting the profession.

The repeal came as the result of House and Senate negotiation of the budget for fiscal year 2019/2020 over the past week to address $22 million the state was receiving for the first time from online sales tax revenue. As lawmakers debated how offset this new revenue with tax reductions elsewhere in the budget, AIA Tennessee was at the table as the voice of architects to advocate for tax benefits to the profession.

With support from other affected professions, legislators advocated for the long-maligned professional privilege tax to be repealed. This $400 annual tax has been the subject of bills since its enactment, and in this year’s budget (passed unanimously in the House and Senate), this new revenue was dedicated to repealing the professional privilege tax. As a result, an amendment to SB398/HB1262 was drafted to accomplish this and has been passed in both the House and Senate yesterday, May 1, 2019.

In the legislation as amended the following professions are all now exempt from the professional privilege tax beginning May 31, 2020:

  1. accountants,
  2. architects,
  3. athlete agents,
  4. audiologists,
  5. chiropractors,
  6. dentists,
  7. engineers,
  8. landscape architects,
  9. optometrists,
  10. pharmacists,
  11. podiatrists,
  12. psychologists,
  13. real estate brokers,
  14. speech pathologists, and
  15. veterinarians

Remaining in statute and paying the $400 tax are:

  1. lobbyists,
  2. broker-dealers,
  3. investment advisers,
  4. physicians and
  5. attorneys.

This was an issue that the majority of other professions have supported. AIA TN has proceeded with caution over the course of this debate to ensure that repeal would not result in a future tax on services, but this year the General Assembly was adamant that no new taxes would be considered. AIA Tennessee will of course remain vigilant in opposing any future taxes on the profession or other regulations that would negatively impact members.

On behalf of AIA Tennessee, I want to express thanks to AIA Tennessee Executive Vice President Ashley Cates, our lobbyists Bill Nolan and Lindsay Spain, and the AIA Tennessee Government Relations Committee for their work in achieving this result and for their tireless advocacy for our members, firms, and the practice of architecture in Tennessee. We look forward to sharing further updates from the legislative session soon. Thank you as always to our members for your support of the profession.

Josh Flowers, FAIA
President, AIA Tennessee