<\/i> Tyson chicken barns in West Tennessee on April 21, 2021. (Photo: John Partipilo)<\/p>\n
They\u2019re scattered across the rural Tennessee landscape: blue-sided barns stretching the length of five U.S. football fields, clustered together in groups numbering as few as three to as many as 20.<\/span> But the reality is more complicated, according to Amy Gore, a policy and research director with the Nashville-based think tank ThinkTennessee and author of a recently published report on how <\/span>Tennessee\u2019s working families are \u201cpaying more than their fair share.\u201d The Tennessee Department of Revenue classifies nearly two dozen items as \u201cmajor tax exemptions\u201d costing the state government an estimated $5.5 billion in fiscal year 2025 and local governments $1.5 billion. Officials deems these as \u201cexemptions\u201d because at one time companies or people paid the full tax, or paid it at a higher rate.<\/span> \t\tIf you have the resources to hire lobbyists who can pass legislation that exempts your industry from paying taxes, then of course you’re going to do that.<\/p>\n \t\t\u2013 Rep. Aftyn Behn, D-Nashville<\/b><\/p>\n At the same time, state lawmakers often exempt or significantly reduce a company\u2019s tax rate for business necessities, such as fuel to fly planes or water to raise chickens.<\/span> Other sales tax exemptions have saved internet providers AT&T \u2013 the state\u2019s second largest political spender since 2009 \u2013 Comcast, and other internet service providers more than\u00a0<\/span>$204 million by removing fiber optic cables from the state\u2019s tax rolls, as the state and federal governments gave those same companies $650 million for new broadband investment in 2022.\u00a0<\/span> The Tennessee Farm Bureau has spent $3.4 million lobbying lawmakers since 2009, or around $225,000 annually, through its two lobbying groups.<\/span> Tyson Foods doesn\u2019t lobby or run a political action committee in Tennessee. Instead, the Farm Bureau lobbies for laws benefiting the company. Tyson uses hundreds of subcontracted chicken farmers and grain producers to support its processing plants, making it one of the largest agriculture businesses in Tennessee and a significant customer for the Farm Bureau\u2019s insurance business. The Lookout made multiple attempts to reach out to Tyson through its media contact, and never received a response.\u00a0<\/span> \t\tWe depend on agriculture in this country like nobody knows about. We’ve got to protect our agriculture producers that are providing everything they do for us on a daily basis. That’s why we feel like it should be exempt.<\/p>\n \t\t\u2013 Lee Maddox, Tennessee Farm Bureau<\/b><\/p>\n The regulatory changes helped protect Tyson legally from public criticism over air and water pollution, tying the hands of local politicians from doing anything, even when public complaints and \u2018No Tyson\u2019 groups arose. <\/span> SUPPORT NEWS YOU TRUST.<\/p>\n DONATE<\/p>\n Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our website. AP and Getty images may not be republished. Please see our republishing guidelines for use of any other photos and graphics.<\/p>\n","protected":false},"excerpt":{"rendered":"
\nEach of Tennessee\u2019s nearly 2,200 industrial chicken barns produce about 200,000 six-pound birds each year, a process that collectively consumes more than one billion gallons of water across all the barns annually.\u00a0<\/span>
\nThe typical Tennessean uses around <\/span>30,000 gallons of water per year, costing between $300 to $600 annually depending on where one lives. Everyone pays a local sales tax of at least 2%, and a state rate of 7%, on the water.<\/span>
\nBut the tax bill on water for chicken barns, which in Tennessee are typically controlled by subcontractors for food giants like Tyson Foods, is zero.<\/span>
\n\u201cDuring our peaks, we would often pull 10,000 gallons of water in a single day,\u201d said Craig Watts, a former contract chicken farmer in North Carolina who now works as a director for the Socially Responsible Agriculture Project, which organizes against industrial farming. \u201cIt\u2019s a lot of water, and those new barns in West Tennessee are bigger than what I ran.\u201d<\/span>
\nTennessee lawmakers have touted the state as one of the lowest-taxed in America, with its lack of income tax and relatively low property and business taxes.<\/span><\/p>\n
\n\u201cTennessee\u2019s reliance on sales taxes makes its system regressive,\u201d Gore said.
\nAdditionally, Gore noted high sales taxes on basic household necessities, like gas, water and groceries, mean lower-income families are paying more of their income in taxes compared to wealthy families or large corporations.
\nTennessee is one of only 13 states with a grocery sales tax, and residents pay about 15% more in gas taxes today than they did in 2017.
\nEach tax exemption approved by the state can seem small and inconsequential but adds up over time, costing the state billions of dollars and local governments with smaller budgets even more.<\/span>
\n\u201cA lot of local governments are losing out on potential revenue,\u201d Gore said.<\/span><\/p>\nTyson is one of many businesses exempted from paying taxes on necessities<\/h4>\n
\nNot all these exemptions are tailored to a single company or industry.\u00a0<\/span>
\nAbout $2.5 billion of the uncollected tax revenue is because the state does charge sales taxes on items like prescription drugs, and the state counts a reduction in the food sales tax rate from 5% to 4% seven years ago,<\/strong><\/del> as lost revenue.\u00a0<\/span><\/p>\n
\nBut no company has likely benefited more from sales tax exemptions in Tennessee than FedEx. The company has saved $186 million on jet fuel taxes since 2016 after lawmakers capped its tax bill, gradually lowering the money it paid year after year from <\/span>$32 million that year\u00a0<\/strong>to <\/span>$1 million today.<\/span>
\nLawmakers also <\/span>created specific exemptions to allow the Memphis-based transport company to avoid paying sales tax on construction materials for its multibillion dollar headquarters expansion, saving it an estimated $21.3 million. This year <\/span>state lawmakers allowed the company to reclassify its data center for a tax exemption, saving the company an additional approximately $3.3 million annually.<\/span>
\n\u201cFedEx has long advocated for tax policies that power economic growth in Tennessee,\u201d said FedEx spokesperson Clare Stevens in an email to the Lookout. \u201cLowering the aviation fuel tax structure enables Tennessee to become competitive with surrounding states that have similar caps.\u201d<\/span>
\nFedEx is one of the top political spenders in Tennessee, donating $1.9 million to state lawmakers since 2009, <\/span>according to a Lookout analysis of campaign finance data. Over the same period, the company posted a positive net income for all but one year, netting almost $4 billion in profits in 2023.<\/span>
\nThe Lookout provided FedEx-related facts to the company for review prior to publishing. FedEx declined a request for an interview.<\/span><\/p>\nMore exemptions<\/h4>\n
\nFor decades, Manufacturers like Bridgestone, Nissan, Volkswagen and Eastman Chemical pay reduced rates, or often nothing at all, for gas, water and equipment they purchase due to an industrial and machinery sales tax exemption\u00a0estimated to cost $647 million next year. Each company has spent at least $1 million to influence state politicians over the past 15 years.\u00a0<\/span>
\nBrown-Forman, the owner of Jack Daniel\u2019s, received a<\/span> property tax exemption from lawmakers in 2018 for its whiskey barrels, saving it almost $18 million since then. The company has spent $3 million to influence state lawmakers since 2009.<\/span>
\n\u201cIt\u2019s representative of where the industry muscle is,\u201d said Rep. Afytn Behn, a Nashville Democrat. \u201cIf you have the resources to hire lobbyists who can pass legislation that exempts your industry from paying taxes, then of course you\u2019re going to do that.\u201d<\/span>
\nBehn sponsored a bill in 2024 to completely eliminate the sales tax on grocery, but it failed to make it out of a House subcommittee.<\/p>\nFarm Bureau secures tax break for Tyson right before expansion<\/h4>\n
\nThe Farm Bureau splits itself into a group with its traditional name, dealing with advocacy, and an entity called Tennessee Rural Health, its insurance business. Both operate out of the same Columbia address.\u00a0<\/span>
\n\u201cOur headquarters are in the same building in Columbia, TN. Even though we are in the same building; our staff, corporate structures, and corporate leadership are all different and independent,\u201d said Lee Maddox, a spokesperson for the Tennessee Farm Bureau<\/span>
\nDuring the 2018 legislative session, the Farm Bureau began <\/span>clearing the path for Tyson\u2019s extensive expansion into West Tennessee.<\/span>
\nTyson announced in the fall of 2017 rather than building a new chicken processing plant in northeastern Kansas, where residents adamantly opposed the project, it would open the facility in Humboldt, a town of about 8,500 people 100 miles northwest of Memphis.<\/span>
\nTyson already had a significant footprint in Tennessee by that point, running processing plants in Goodlettsville, Shelbyville, Newbern and Union City. But the Humboldt factory and an expansion in Union City meant the company needed <\/span>600 new chicken barns.<\/span>
\nJames Lavel, a Lexington resident about 40 miles from Tyson\u2019s new chicken processing plant in Humboldt, said the state\u2019s Farm Bureau is powerful, especially when it seems like it\u2019s the voice for Tennessee\u2019s 690,000 farmers, even though it doesn\u2019t always represent all of them.\u00a0<\/span>
\n\u201c[The Farm Bureau] looks more at mid to high-tier farmers,\u201d Lavel said. \u201cThey don\u2019t care as much about the small 20- to 40-acre farmer because they aren\u2019t pumping as much money into the system.\u201d<\/span><\/p>\n
\nThe state Farm Bureau successfully lobbied on the company\u2019s behalf to remove clean water and air permit requirements for chicken barns in 2018, legally referred to as Concentrated Animal Feeding Operations, or CAFOs. This ensured the production of 421 million chickens each year became classified under the much more lax regulatory regime for agricultural products.<\/span>
\nAs construction continued on the Tyson plant and new chicken barns started popping up across West Tennessee counties, the bureau pushed lawmakers to strip local county commissions and health boards of any oversight authority over\u00a0the facilities.<\/span><\/p>\n
\nClassifying factory-sized chicken barns as traditional agriculture had another benefit when paired with a sales tax exemption.<\/span>
\nWith Tyson\u2019s Humboldt factory construction under way in 2019, Tennessee lawmakers unanimously approved an exemption for agriculture producers from paying any sales tax on water and transportation trailers they used in their production process.<\/span>
\n\u201cWe depend on agriculture in this country like nobody knows about,\u201d Maddox said.\u00a0<\/span>
\nHe added the exemption for agriculture mirrored the one provided to factories.
\nBut chicken barns are different than factories, as they don\u2019t have to follow the same air and water regulations because of agriculture Concentrated Animal Feeding Operations <\/span>exemptions granted to them in 2018.
\n\u201cThere\u2019s no doubt it takes a lot of water to feed our animals,\u201d Maddox said.<\/span>
\nThe exact dollar benefit of exemptions for water, trailers and other agriculture exemptions is impossible to know because the state stopped reporting a specific breakdown of agriculture sales breaks in 2010, lumping them together as part of a larger group of industrial and machinery tax breaks.<\/span>
\nThe argument at the time for the tax breaks was that the deal \u201cbenefitted smaller farmers\u201d in Tennessee.<\/span>
\nSen. Frank Niceley, a Strawberry Plains Republican and farmer, said there aren\u2019t many small farmers left, and he\u2019s all for helping them whenever he can.<\/span>
\nNiceley says he\u2019s \u201cespecially willing\u201d to support sales tax breaks when Tennessee runs a budget surplus.<\/span>
\n\u201cYou have to remember, the Farm Bureau represents everybody,\u201d he said.\u00a0<\/span>\u201cSometimes, the stuff you do for the big boys helps the little guys, and sometimes it doesn\u2019t.\u201d<\/span><\/p>\n