AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 6, relative to sales and use taxes.
Summary
SB1081 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 transaction amount, including the sales tax portion, so 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 remittances, the share of transactions made by card, fees charged to residents 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, SB1081 would amend Tennessee Code Annotated Title 67, Chapter 6 by adding a new sales tax remittance provision. It would not change the underlying sales tax rate or tax base, but it would alter the timing of when dealers remit collected sales tax to the state, effectively giving merchants a temporary cash-flow benefit and potentially reducing the burden of card processing fees tied to taxable sales. The Department of Revenue and state treasurer would be responsible for designing and periodically reviewing the remittance schedule, and dealers selling tangible personal property would be the primary affected parties.
Sentiment
The bill text reflects a generally supportive posture toward merchants, emphasizing fairness and the idea that merchants should not bear fees on the state’s portion of sales tax collections. No committee transcripts or recorded votes were provided, so there is no documented debate or formal legislative sentiment available beyond the bill’s own findings and purpose statements. Based on the language, the measure appears intended as a merchant-relief proposal rather than a controversial tax increase or reduction.
Contention
The main point of potential contention is the tradeoff between merchant relief and the timing of state revenue receipts. Supporters would likely argue that merchants deserve compensation for processing fees and that an extended remittance period is a practical, low-disruption fix. Opponents or fiscal watchdogs might question whether delaying remittance creates cash-flow or administrative issues for the state, whether the formula is sufficiently precise, and whether the benefit to merchants is justified by the potential cost to state finances. Because no committee discussion or votes are included, no specific legislator or stakeholder objections are documented.