| 1 | 1 | | |
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| 2 | 2 | | HOUSE BILL 714 |
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| 3 | 3 | | By Baum |
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| 4 | 4 | | |
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| 5 | 5 | | SENATE BILL 1081 |
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| 6 | 6 | | By Johnson |
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| 7 | 7 | | |
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| 8 | 8 | | |
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| 9 | 9 | | SB1081 |
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| 10 | 10 | | 002835 |
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| 11 | 11 | | - 1 - |
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| 12 | 12 | | |
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| 13 | 13 | | AN ACT to amend Tennessee Code Annotated, Title 67, |
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| 14 | 14 | | Chapter 6, relative to sales and use taxes. |
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| 15 | 15 | | |
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| 16 | 16 | | WHEREAS, Tennessee's merchants are Tennessee's primary tax collectors; and |
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| 17 | 17 | | WHEREAS, these merchants pay fees on sales taxes associated with card transactions; |
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| 18 | 18 | | and |
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| 19 | 19 | | WHEREAS, these fees are applied on the entire cost of the transaction including the |
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| 20 | 20 | | sales tax portion; and |
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| 21 | 21 | | WHEREAS, merchants should not have to pay fees on behalf of the State, the State |
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| 22 | 22 | | being the sole beneficiary of the sales tax portion of the transaction; and |
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| 23 | 23 | | WHEREAS, in the interest of fairness, the State should find a method to make |
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| 24 | 24 | | merchants whole without disruption of the collection and remittance of sales taxes by |
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| 25 | 25 | | merchants; and |
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| 26 | 26 | | WHEREAS, the financial principle of time value of money allows merchants to retain |
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| 27 | 27 | | sales tax payments for a period to allow merchants to reasonably recoup these fees before |
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| 28 | 28 | | remitting the sales tax collected; now, therefore, |
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| 29 | 29 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNE SSEE: |
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| 30 | 30 | | SECTION 1. Tennessee Code Annotated, Title 67, Chapter 6, Part 1, is amended by |
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| 31 | 31 | | adding the following as a new section: |
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| 32 | 32 | | (a) The commissioner, in consultation with the state treasurer, shall establish a |
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| 33 | 33 | | sales tax remittance schedule that allows dealers making sales of tangible personal |
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| 34 | 34 | | property to reasonably offset the burden of transaction fees associated with the |
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| 35 | 35 | | collection of sales tax on those sales. The schedule must extend the holding time of |
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| 36 | 36 | | |
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| 37 | 37 | | |
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| 38 | 38 | | - 2 - 002835 |
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| 39 | 39 | | |
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| 40 | 40 | | accumulated sales tax for a period within which dealers can reasonably recoup their |
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| 41 | 41 | | transaction costs before remittance to the department. This holding time must be |
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| 42 | 42 | | derived from: |
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| 43 | 43 | | (1) This state's total sales tax remittance during the previous year; |
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| 44 | 44 | | (2) The percentage of transactions conducted through credit card and |
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| 45 | 45 | | debit card tender; |
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| 46 | 46 | | (3) This state's fees to its residents for credit card transactions, including |
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| 47 | 47 | | service and convenience fees; and |
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| 48 | 48 | | (4) The risk-free federal funds rate as defined by the federal reserve. |
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| 49 | 49 | | (b) The commissioner shall monitor the holding time on a biannual basis for |
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| 50 | 50 | | appropriateness. |
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| 51 | 51 | | (c) This section does not require the department to change its current processes |
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| 52 | 52 | | or forms for collecting and remitting sales tax other than establishing an extended |
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| 53 | 53 | | timeframe for remittance. |
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| 54 | 54 | | SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it. |
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