Tennessee House Bill HB2502

Tennessee 2025-2026 Regular Session

• Introduced: 2/3/26
• Refer: 2/5/26
• Refer: 3/11/26
• Refer: 3/18/26
• Refer: 3/25/26
• Refer: 3/31/26
• Engrossed: 4/9/26
• Enrolled: 4/28/26
• Passed: 5/21/26
• Chaptered: 5/27/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 4; Title 38; Title 39; Title 45; Title 47; Title 49 and Title 67, relative to money transmission.

Summary

HB2502 creates a new tax treatment for money transmission services that send funds from Tennessee to locations outside the United States or its territories when the service is provided by a licensed money transmitter under the Money Transmission Modernization Act. The bill imposes a tax of $10 per transaction, plus 2% of any amount over $500, and expressly exempts these transactions from local option sales tax. It also defines how the origin and destination of a transfer are determined for tax purposes, including reliance on customer-provided address information and provider records. The bill directs the revenue from this new tax into several dedicated accounts rather than the general fund alone. The largest share goes to a TennCare buyback fund for hospital buybacks, with additional allocations for child care pilot programs and targeted assistance, workforce housing initiatives, and paid teacher internships in public schools and public charter schools. It also specifies that these special-account funds do not revert to the general fund and are to remain available until spent for their designated purposes. The act takes effect immediately for rulemaking and forms, but most provisions take effect January 1, 2027.

Impact

HB2502 amends Tennessee Code Annotated provisions in Title 67 governing sales and use tax sourcing, exemptions, and allocation of tax revenues, and it adds a new section exempting certain outbound international money transmission services from local option tax. It also ties the tax to the Money Transmission Modernization Act in Title 45, meaning licensed money transmitters are the primary regulated entities affected. The bill changes how these services are sourced for tax purposes and creates multiple special treasury accounts and spending streams for health care, child care, housing, and teacher training.

Sentiment

The bill appears to have generally favorable support as it moved through committee and floor votes, passing each stage with clear majorities. Committee recommendations were mostly for passage, often with amendments, and the final House action concurred in a Senate amendment by a substantial margin. The voting pattern suggests broad acceptance of the bill’s revenue-raising structure and its earmarked spending priorities, though not unanimous support.

Contention

The main points of contention likely centered on the creation of a new tax on money transmission services and the decision to direct the proceeds into multiple dedicated funds rather than the general fund. Opponents may have objected to the added cost on remittance customers, especially those sending money abroad, and to the complexity of sourcing and exemption rules for providers. Supporters appear to have emphasized the bill’s funding uses—TennCare hospital buybacks, child care, workforce housing, and teacher internships—as public-benefit investments that justified the tax.