Tennessee House Bill HB0767

Tennessee 2025-2026 Regular Session

• Introduced: 2/4/25
• Refer: 2/6/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, Part 7, relative to taxation.

Summary

HB0767 amends Tennessee’s sales and use tax provisions in Title 67, Chapter 4, Part 7 to create a new tax exemption for certain high-cost prescription drugs and related services. Specifically, it removes a prior reference in the statute and adds a new exemption for prescription drugs or medicines whose cost for a 30-day equivalent supply exceeds the Medicare Part D specialty tier cost threshold for 2025 plan years, as determined by CMS. It also exempts receipts from services necessary to prepare, store, handle, administer, educate patients about, or monitor those exempt drugs after sale. The bill is narrowly targeted at expensive prescription medications and the support services associated with them. It is set to take effect July 1, 2025, and would reduce tax liability for qualifying drug sales and related pharmacy or clinical services by excluding those receipts from the tax base.

Impact

If enacted, the bill would amend Tennessee Code Annotated § 67-4-708 and § 67-4-712 to carve out a new sales tax exemption for certain prescription drugs and associated services. This would affect pharmacies, drug manufacturers, healthcare providers, and consumers purchasing high-cost specialty medications, while reducing state and local tax collections on qualifying transactions. The exemption is tied to a federal Medicare Part D benchmark, so the scope of the exemption would depend on CMS’s 2025 specialty tier cost threshold.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or formal support/opposition in the available record. Based on the bill text alone, the measure appears policy-focused and targeted rather than controversial on its face, with an apparent intent to ease the tax burden on patients using expensive specialty medications and the services needed to manage them.

Contention

The main potential point of contention is fiscal: exempting high-cost prescription drugs and related services would reduce tax revenue, which may concern budget-minded lawmakers or tax administrators. Another possible issue is the use of a federal Medicare Part D threshold to define eligibility, which could raise questions about administrative complexity, future changes in federal benchmarks, and whether the exemption is appropriately targeted. No specific opposing or supporting viewpoints are documented in the provided materials.