SB 1205 - HB 1218
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
March 12, 2025
Fiscal Analyst: Elizabeth Bransford | Email: elizabeth.bransford@capitol.tn.gov | Phone: 615-741-2564
SB 1205 - HB 1218
SUMMARY OF BILL: Exempts from the state and local sales tax the sale of feminine
hygiene products.
FISCAL IMPACT:
STATE GOVERNMENT
REVENUE General Fund
FY25-26 & Subsequent Years NET ($18,888,500)
LOCAL GOVERNMENT
REVENUE Mandatory
FY25-26 & Subsequent Years NET ($7,707,900)
Assumptions:
• 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. Elimination of the sales and use tax
on feminine hygiene products will also eliminate the local option sales tax on such products.
• 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.
• 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).
• The recurring decrease in state sales tax revenue is estimated to be $19,830,395
[($293,922,540 x 7.0%) - ($293,922,540 x 7.0% x 3.617%)] in FY25-26 and subsequent
years.
• The recurring decrease in local sales tax revenue is estimated to be $8,092,246
[($293,922,540 x 2.5%) + ($293,922,540 x 7.0% x 3.617%)] in FY25-26 and subsequent
years.
• Fifty percent of tax savings, or $13,961,321 [($19,830,395 + $8,092,246) x 50%], will be
spent in the economy on other sales-taxable goods and services.
SB 1205 - HB 1218 2
• The net increase in state sales tax collections as a result of tax savings being spent in the
economy is estimated to be $941,944 [($13,961,321 x 7.0%) - ($13,961,321 x 7.0% x
3.617%)] in FY25-26 and subsequent years.
• The increase in local sales tax collections as a result of tax savings is estimated to be
$384,382 [($13,961,321 x 2.5%) + ($13,961,321 x 7.0% x 3.617%)] in FY25-26 and
subsequent years.
• The total net decrease in state revenue is estimated to be $18,888,451 ($19,830,395 -
$941,944) in FY25-26 and subsequent years.
• The total mandatory net decrease in local revenue is estimated to be $7,707,864 ($8,092,246
- $384,382) in FY25-26 and subsequent years.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director