In a move aimed at reviving the state's economy and increasing revenue streams, the Tennessee legislature has proposed a series of significant taxation reforms. The proposed changes, which were announced on February 19, 2026, are expected to have far-reaching implications for residents and businesses across the state.One of the key reforms being considered is a comprehensive overhaul of the state's sales tax system. Under the proposed changes, certain goods and services that were previously exempt from sales tax may now be subject to taxation. This includes items such as clothing, groceries, and prescription medications. Proponents of the reform argue that broadening the sales tax base will help generate much-needed revenue for the state while also creating a more equitable tax system.Another major proposal put forward by the legislature is a restructuring of the state's income tax brackets. The current system, which imposes a flat rate income tax on all residents, may be replaced with a tiered system that taxes higher-income individuals at a higher rate. This change is intended to ensure that wealthier individuals contribute a larger share of their income towards state taxes, while providing relief for lower-income households.In addition to these reforms, the legislature is also considering implementing a tax on digital goods and services. With the rise of online shopping and streaming platforms, lawmakers believe that instituting a tax on digital purchases could help offset declining revenues from traditional retail sales. This tax would apply to a wide range of digital products, including e-books, streaming subscriptions, and app downloads.While these proposed reforms have been met with some opposition from taxpayers and business owners, supporters argue that they are necessary to address the state's financial challenges and stimulate economic growth. Governor Sarah Johnson has expressed her support for the reforms, stating that they are essential for ensuring Tennessee remains competitive in the ever-evolving global economy.As the legislature continues to debate and refine these proposed taxation reforms, residents and businesses in Tennessee are encouraged to stay informed and participate in the ongoing discussions. The outcome of these reforms is expected to have a significant impact on the state's fiscal health and economic future.