Tennessee Senate Bill SB1315

Tennessee 2025-2026 Regular Session

• Introduced: 2/6/25
• Chaptered: 5/8/25
• Passed: 5/8/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4; Title 67, Chapter 6 and Title 67, Chapter 7, relative to state administration fee on tax collection.

Summary

SB1315 reduces the state administration fee retained by the Tennessee Department of Revenue when collecting and distributing certain state and local taxes. The bill lowers the fee from 1.125% to 0.75% in several provisions of Title 67, including taxes covered under Chapters 4, 6, and 7, and it updates the local sales tax distribution formula so counties, cities, and towns receive tax proceeds less a 0.75% administrative deduction. It also deletes a subsection of the sales tax collection statute that is no longer needed under the revised fee structure. The measure takes effect July 1, 2025, and applies to tax collections received on or after that date. In practical terms, it reduces the amount the state may keep to cover administrative costs and increases the share of collected tax revenue remitted to local governments and other affected recipients, while leaving the underlying tax rates themselves unchanged.

Impact

The bill amends multiple sections of Tennessee Code Annotated, primarily in Title 67, to standardize the state administration fee for tax collection at 0.75% instead of 1.125%. This affects the distribution of certain tax revenues administered by the Department of Revenue, including local option sales taxes and other taxes referenced in the amended code sections. The main legal effect is a reduction in the administrative retention allowed to the state and a corresponding increase in net remittances to local taxing jurisdictions and other recipients.

Sentiment

The bill appears to have broad support and little visible opposition. It passed the Senate State & Local Government Committee 9-0 and the Senate Finance, Ways and Means Committee 10-0, indicating unanimous committee approval at each stage reflected in the available record. The absence of recorded committee discussion or dissent suggests the measure was viewed as a routine fiscal adjustment rather than a controversial policy change.

Contention

No specific points of contention are documented in the available transcripts or vote summaries. Because the bill reduces the administrative fee retained by the state, any potential concerns would likely center on whether the lower fee adequately covers the Department of Revenue’s collection and distribution costs, or on the fiscal impact to state administration budgets. However, the recorded votes show no opposition, and no member or stakeholder objections are identified in the provided materials.