AN ACT to amend Tennessee Code Annotated, Title 4; Title 54; Title 55; Title 65 and Title 67, relative to transportation.
SB0144 is a transportation funding measure that changes how Tennessee taxes on new and used tires are distributed. Beginning July 1, 2025, all revenue collected from the sale, use, consumption, or distribution of tires is directed to the state highway fund, rather than being allocated under the general sales tax distribution rules. The bill defines “tire” by reference to existing law and creates a special allocation rule for this revenue stream.
The bill also places a cap on the amount redirected to the highway fund during fiscal year 2025-2026: no more than $80 million may be apportioned under the new tire-tax allocation rule, and any revenue above that amount continues to be distributed under the existing subsection (a) framework. In addition, the bill preserves two existing earmarks by excluding from the new highway-fund allocation any revenue tied to the 1992 sales-tax increase dedicated to education and the 2002 sales-tax increase from 6% to 7%.
Its main legal effect is to amend Tennessee Code Annotated § 67-6-103 and alter the state’s sales tax revenue allocation scheme for tire-related transactions. The practical impact is to increase dedicated funding for highways and transportation infrastructure while protecting certain legacy education-related revenue streams from being diverted. Tire sellers, consumers, and state revenue administrators would be affected by the revised allocation rules.
The bill appears to have broad support and little visible opposition in the available record. It passed the Transportation and Safety Committee 8-0 and the Senate Finance, Ways and Means Committee 11-0, both with amendments and referral onward. The committee record suggests consensus around transportation funding priorities, with no recorded dissent or substantive controversy in the provided materials.
Notable points of contention, to the extent they can be inferred, would likely center on the redirection of tax revenue away from the general allocation formula and the temporary $80 million cap in the first fiscal year. However, no specific objections, amendments in dispute, or opposing viewpoints are included in the available transcript or vote history.
The bill amends Tennessee Code Annotated § 67-6-103 to create a new revenue allocation rule for taxes collected from the sale, use, consumption, or distribution of tires. Effective July 1, 2025, those revenues are earmarked for the highway fund, subject to an $80 million cap in fiscal year 2025-2026, while preserving existing allocations for certain education-dedicated sales tax revenues. This changes state revenue distribution for transportation funding and affects tire-related tax receipts, highway funding, and the administration of sales tax allocations.
The available legislative history shows strong, unanimous support in committee. The bill was recommended for passage by both the Transportation and Safety Committee and the Senate Finance, Ways and Means Committee with 8-0 and 11-0 votes, respectively, and no recorded opposition in the provided materials. The overall sentiment appears favorable, reflecting agreement on prioritizing transportation infrastructure funding.
No explicit controversy is documented in the provided transcripts or vote records. The only likely areas of debate are the diversion of tire-tax revenue to the highway fund and the $80 million cap for the first fiscal year, since both affect how state tax receipts are distributed. Any concern would likely come from stakeholders focused on general fund allocations or education-related earmarks, but the record provided does not show named opponents or disputed amendments.