AN ACT to amend Tennessee Code Annotated, Section 67-6-103, relative to distribution of revenues.
Summary
SB 177 amends Tennessee’s revenue-distribution statute for sales and use tax receipts tied to earlier tax changes enacted in Public Acts 2002, chapter 856. The bill directs that revenue generated from the 2.75% tax on the portion of a single article of personal property priced above $1,600 and up to $3,200 be deposited into the state general fund for general state purposes. It also creates a new allocation rule for revenue generated by the 2002 increase in the sales and use tax rate from 6% to 7%, specifying that 4.6030% of that revenue be apportioned to incorporated municipalities under existing municipal distribution rules, while 95.3970% goes to the state general fund.
The bill further updates multiple cross-references in Tennessee Code Annotated Section 67-6-103 so that several existing distribution provisions now point to the revised allocation structure, including the new subdivision created by the bill. In practical terms, it does not change the sales tax rate itself; instead, it changes how certain sales tax revenues are divided between the state and municipalities. The act is scheduled to take effect July 1, 2025.
The available record shows no committee transcript and no recorded votes, so there is no documented floor or committee debate to indicate strong support or opposition. Based on the text alone, the measure appears to be a technical fiscal allocation bill focused on revenue distribution rather than a policy change affecting taxpayers directly.
Because the bill reallocates sales tax receipts between the state general fund and incorporated municipalities, likely points of interest would be state budget officials and municipal governments. The main potential contention would be over how much revenue should remain with the state versus how much should be shared with cities, but no specific objections or endorsements are included in the provided materials.
Impact
SB 177 amends Tennessee Code Annotated § 67-6-103 to revise the statutory distribution of certain sales and use tax revenues, including receipts associated with the 2002 sales tax increase and the tax on higher-priced single articles of personal property. It shifts specified revenue into the state general fund and establishes a defined municipal apportionment percentage for part of the 2002 tax-increase revenue. The bill affects state fiscal administration, municipal revenue sharing, and the allocation formulas used by the Department of Revenue and other state finance officials.
Sentiment
There is no committee transcript or voting history provided, so the bill’s sentiment cannot be measured from recorded debate. On its face, the measure appears administrative and fiscal in nature, suggesting a neutral-to-technical posture rather than a controversial policy change. The absence of recorded opposition or support in the supplied materials indicates no documented public controversy in this record.
Contention
The primary substantive issue is the division of sales tax revenue between the state and incorporated municipalities. State fiscal interests would favor retaining a larger share in the general fund, while municipalities would be attentive to the portion earmarked for local distribution. Because the bill changes revenue allocation formulas rather than tax rates or taxpayer obligations, any contention would likely center on budget impacts and intergovernmental revenue sharing rather than taxpayer burden.