Tennessee Senate Bill SB1734

Tennessee 2023-2024 Regular Session

• Introduced: 1/10/24

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 6, Part 3, relative to tax exemptions.

Impact

The implementation of SB1734 is anticipated to shift tax burdens and potentially incentivize cash transactions over other forms of payment. By establishing a clear exemption threshold, the bill may encourage consumers to pay in cash, thus reducing the total amount of sales tax collected on transactions below the five hundred dollar mark. This could be particularly impactful for businesses that typically engage in lower-value sales, allowing them to retain a larger portion of the sale amount while also possibly appealing to customers who prefer cash transactions.

Overall

The legislative discussions around SB1734 are expected to address both the economic implications of encouraging cash transactions as opposed to digital payments and the broader impact on public revenue streams. Such an analysis will be vital, as lawmakers consider the balance of incentivizing certain purchasing behaviors while maintaining healthy funding for the state’s services.

Summary

Senate Bill 1734, sponsored by Senator Niceley, proposes an amendment to Tennessee Code Annotated, specifically targeting tax exemptions related to the sales tax on tangible personal property. The bill aims to exempt the first five hundred dollars of a sale from the sales tax if the purchase is made using physical cash. This exemption includes coins, paper money, and even precious metals such as gold and silver, which are recognized as legal tender under federal law.

Contention

A point of contention surrounding SB1734 lies in its potential implications for state revenue. Critics could argue that while the bill is designed to benefit consumers and businesses alike by reducing tax expenditures, it may also lead to a significant decrease in overall state tax revenue, which could affect funding for public services and state programs. Additionally, there may be concerns regarding the equitable treatment of purchases made through other means, such as credit cards or digital payments, which do not receive the same tax exemptions as cash transactions. This could lead to a debate on the fairness of the tax system and how it should evolve in response to changing payment technologies.