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Tennessee Gov. Haslam signs gas tax, road funding plan into law

(File Photo)

Tennessee Gov. Bill Haslam signed the IMPROVE Act into law on Tuesday afternoon.

The law will take effect on July 1.

It includes the state's first gas tax hike since 1989. That tax will be raised six cents over the course of three years. The law would also raise diesel by 10 cents during that period to help pay for road improvements across the state.

The law also cuts the sales tax on groceries, corporate taxes on manufacturers and the tax on earnings from stocks and bonds.

Both chambers passed the bill last week. In a final vote Monday, the House agreed to include disabled veterans property tax relief and sent the bill to Haslam's desk. The bill aims to start addressing a $10 billion backlog in Tennessee road and bridge projects.

Susie Alcorn, executive director of the Tennessee Infrastructure Alliance released the following statement to express the organization's joy over the act's passing.

We thank Gov. Bill Haslam for signing the IMPROVE Act into law. All Tennesseans will benefit from the largest tax cut in state history and our residents, visitors and businesses will enjoy an enhanced transportation system.

It’s smart to have better roads, safe bridges AND tax cuts. Specific thanks are due to the members of the Tennessee General Assembly who worked tirelessly for passage of the IMPROVE Act, in particular Senate sponsor Sen. Mark Norris and House sponsor Rep. Barry Doss.


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