SB 188 – HB 813
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 20, 2025
Fiscal Analyst: Elizabeth Bransford | Email: elizabeth.bransford@capitol.tn.gov | Phone: 615-741-2564
SB 188 – HB 813
SUMMARY OF BILL: Exempts from state and local sales tax, during the annual sales tax
holiday weekend, the sale of feminine hygiene products.
FISCAL IMPACT:
STATE GOVERNMENT
REVENUE General Fund
FY25-26 & Subsequent Years NET ($255,000)
LOCAL GOVERNMENT
REVENUE Mandatory
FY25-26 & Subsequent Years $3,600
Assumptions:
• Based on population projections published by the Tennessee State Data Center for 2025, it
is estimated there are 1,632,903 women in the state between the ages of 15 and 49.
• Assuming on average a woman in Tennessee spends approximately $180 each year on
feminine hygiene products, total annual sales of such products are estimated to be
$293,922,540 (1,632,903 x $180).
• Sales of feminine hygiene products are estimated to increase by 15 percent during the three-
day sales tax holiday as a result of customers shifting their purchases to the holiday that
would otherwise occur outside of that timeframe.
• Therefore, total sales of such products during the holiday are estimated to be $2,778,172
[$293,922,540 x (3-day holiday weekend / 365 days a year) x 1.15 increase in sales during
the weekend].
• Pursuant to Tenn. Code Ann. § 67-6-702(a), local governments are authorized to levy a tax
on the same privileges subject to the state sales tax rate.
• Pursuant to Tenn. Code Ann. § 67-6-710(g), local governments will be held harmless from
the loss of revenue resulting from the sales tax holiday.
• Based on information previously provided by the Department of Revenue, this provision is
assumed to apply to both local option sales tax revenue and the state-shared sales tax
allocation and is reflected as a decrease in state revenue.
• The current state sales tax rate is 7.0 percent; the average local option sales tax rate is
estimated to be 2.5 percent; the effective rate of apportionment to local government
pursuant to the state-shared allocation is estimated to be 3.617 percent.
SB 188 – HB 813 2
• The recurring decrease in state sales tax revenue, beginning in FY25-26, is estimated to be
$263,926 [($2,778,172 x 7.0%) + ($2,778,172 x 2.5)].
• Fifty percent of tax savings, or $131,963 ($263,926 x 50%), will be spent in the economy on
other sales-taxable goods and services.
• The net increase in state sales tax collections is estimated to be $8,903 [($131,963 x 7.0%) –
($131,963 x 7.0% x 3.617%)] in FY25-26 and subsequent years.
• The increase in local revenue is estimated to be $3,633 [($131,963 x 2.5%) + ($131,963 x
7.0% x 3.617%)] in FY25-26 and subsequent years.
• The net decrease in state revenue as a result of this legislation is estimated to be $255,023
($263,926 - $8,903).
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director