SENATE BILL 1081
By Johnson
HOUSE BILL 714
By Baum
HB0714
002835
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AN ACT to amend Tennessee Code Annotated, Title 67,
Chapter 6, relative to sales and use taxes.
WHEREAS, Tennessee's merchants are Tennessee's primary tax collectors; and
WHEREAS, these merchants pay fees on sales taxes associated with card transactions;
and
WHEREAS, these fees are applied on the entire cost of the transaction including the
sales tax portion; and
WHEREAS, merchants should not have to pay fees on behalf of the State, the State
being the sole beneficiary of the sales tax portion of the transaction; and
WHEREAS, in the interest of fairness, the State should find a method to make
merchants whole without disruption of the collection and remittance of sales taxes by
merchants; and
WHEREAS, the financial principle of time value of money allows merchants to retain
sales tax payments for a period to allow merchants to reasonably recoup these fees before
remitting the sales tax collected; now, therefore,
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNE SSEE:
SECTION 1. Tennessee Code Annotated, Title 67, Chapter 6, Part 1, is amended by
adding the following as a new section:
(a) The commissioner, in consultation with the state treasurer, shall establish a
sales tax remittance schedule that allows dealers making sales of tangible personal
property to reasonably offset the burden of transaction fees associated with the
collection of sales tax on those sales. The schedule must extend the holding time of
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accumulated sales tax for a period within which dealers can reasonably recoup their
transaction costs before remittance to the department. This holding time must be
derived from:
(1) This state's total sales tax remittance during the previous year;
(2) The percentage of transactions conducted through credit card and
debit card tender;
(3) This state's fees to its residents for credit card transactions, including
service and convenience fees; and
(4) The risk-free federal funds rate as defined by the federal reserve.
(b) The commissioner shall monitor the holding time on a biannual basis for
appropriateness.
(c) This section does not require the department to change its current processes
or forms for collecting and remitting sales tax other than establishing an extended
timeframe for remittance.
SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it.