AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 6, relative to sales and use taxes.
Summary
HB0714 would require the Tennessee commissioner of revenue, in consultation with the state treasurer, to create a sales tax remittance schedule that gives dealers selling tangible personal property more time to hold collected sales tax before sending it to the state. The stated purpose is to help merchants offset credit and debit card transaction fees that are charged on the full purchase amount, including the sales tax portion, so that merchants are not effectively paying fees on money that belongs to the state.
The bill directs the remittance schedule to be based on several factors, including the state’s prior-year sales tax remittance volume, the share of transactions made by card, the fees Tennessee residents pay for card transactions, and the federal funds rate. The commissioner would review the holding period twice a year to determine whether it remains appropriate. The bill also specifies that the Department of Revenue would not need to change its existing collection forms or processes beyond extending the remittance timeframe.
Impact
If enacted, the bill would amend Tennessee Code Annotated Title 67, Chapter 6 by adding a new sales tax remittance provision. It would not change the sales tax rate or the underlying tax base, but it would alter the timing of when merchants remit collected sales tax to the state. The practical effect would be to give dealers a temporary cash-flow benefit intended to help offset payment-processing fees, while preserving the state’s ability to collect the full amount of sales tax due.
Sentiment
The bill’s tone is strongly supportive of merchants and framed as a fairness measure. The bill text argues that merchants serve as the state’s tax collectors and should not bear card-processing fees on the state’s share of sales tax. No committee transcripts or recorded votes were provided, so there is no additional evidence of opposition or support beyond the bill’s own stated rationale.
Contention
The main policy issue is whether extending the remittance period is an appropriate way to compensate merchants for card transaction fees, versus other possible approaches such as direct fee relief, tax credits, or changes to payment processing rules. Potential concerns would likely center on the state’s cash-flow impact, administrative complexity in calculating and monitoring the holding period, and whether delaying remittance creates any risk to revenue timing. Because no committee discussion or vote history is available, specific supporters or opponents cannot be identified from the provided materials.