HB 57 – SB 115
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
January 25, 2025
Fiscal Analyst: Justin Billingsley | Email: justin.billingsley@capitol.tn.gov | Phone: 615-741-2564
HB 57 – SB 115
SUMMARY OF BILL: Requires municipal governing bodies to submit mandatory annual
audits to the Comptroller of the Treasury (COT) no later than six months following the end of a
municipality’s fiscal year. Establishes a penalty for any municipality having two or more outstanding
late annual audits, equal to no more than 15 percent of the total amount of state-shared sales tax
revenue due to the municipality in any given fiscal year, which must be held in reserve by the
Department of Revenue (DOR) and allocated to a municipality upon compliance. Authorizes the
COT to waive any such penalty in accordance with its established policies and procedures.
FISCAL IMPACT:
NOT SIGNIFICANT
Assumptions:
• Pursuant to Tenn. Code Ann. § 6-56-105(e), all municipal annual audits must be completed
as soon as practicable after the end of each municipality’s fiscal year.
• Requiring municipalities submit mandatory audits to the COT no later than six months
following the end of a fiscal year will not significantly impact local operations; any fiscal
impact is estimated to be not significant.
• A municipality having two or more outstanding annual audits would be subject to the
following penalty: an amount mutually agreed upon by the COT and the Commissioner of
DOR, up to 15 percent of the total amount of state-shared sales tax revenue due to the
municipality in any given fiscal year, must be held in reserve by the DOR until the
municipality is compliant.
• Any impact to the operations of the COT and DOR is not significant.
• Based on information provided by the COT and DOR, the following table includes
municipalities which currently have two or more outstanding annual audits, their FY23-24
state-shared sales tax revenue, and the potential maximum amount of revenue reserved:
HB 57 – SB 115 2
Municipality
FY23-24 State-
Shared Sales Tax
Revenue
Potential Local
Revenue Reserved
Big Sandy $ 59,642 $ 8,946
Decherd $ 291,953 $ 43,793
Gibson $ 44,916 $ 6,737
Moscow $ 70,196 $ 10,529
Oneida $ 464,743 $ 69,711
Sharon $ 114,744 $ 17,212
Yorkville $ 28,962 $ 4,344
Totals $ 1,075,156 $ 161,273
• Following passage of the proposed legislation, if the above municipalities remain
noncompliant, it is estimated that a maximum of $161,273 will be held in reserve by DOR
and allocated to the appropriate municipalities upon compliance.
• It is assumed that noncompliant municipalities will come into compliance with this new
deadline and ultimately receive their portions of state-shared sales tax revenue; therefore,
this legislation is estimated to result in no significant fiscal impact to state or local
government.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director