Tennessee, Kentucky file lawsuit against Biden Administration state tax policy

NASHVILLE (WSMV) - Tennessee and Kentucky's Attorneys General joined together in a lawsuit that challenges a mandate from the Biden Administration in the American Rescue Plan Act. 

The Tennessee AG's office says the lawsuit argues that the federal government is using COVID relief to overrule States' tax policies. 

“The states have a constitutional right to implement their own tax policy,” General Herbert H. Slatery said. “We should not have to choose between accepting COVID-19 relief funds or surrendering to Washington’s attempt to override what only our elected officials in Tennessee are authorized to do.”

A release sent by the attorneys general states the lawsuit that is requiring states to reluctantly agree to a sweeping tax mandate “is an unprecedented power grab by the federal government at a time when elected officials should be singularly focused on helping their constituents overcome the devastating effects of the pandemic."

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President Joe Biden got almost everything he wanted with his $1.9 trillion economic rescue plan. Goldman Sachs thinks Biden will face far more resistance in his quest to unwind former President Donald Trump's tax cuts.

Tennessee reportedly expects to receive about $3.7 billion under the Act. 

“Kentuckians expect state tax policies to be set by the men and women they elect to represent them in the General Assembly, and not as a result of an edict from the Federal Government,” Attorney General Daniel Cameron said.  “These COVID relief funds are essential to helping the Commonwealth and hardworking Kentuckians recover from the effects of the pandemic, and it is unconstitutional for the Biden Administration to hold the funds hostage if we don’t agree to Washington’s preferred tax policies.”

 To see a copy of the motion, click here.