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SB 2295

Alcoholic Beverage Commission - As introduced, requires the commission to submit to the members of the general assembly, by February 1 rather than February 15, of each odd-numbered year, a biennial report on the prevention of underage drinking, drunk driving, and other harmful uses of alcohol. - Amends TCA Title 57 and Title 67.

114th Regular Session (2025-2026) Introduced by Page Walley

Tennessee would tax inhalable liquid hemp-derived cannabinoid products at 10% of wholesale price, with 80% of revenue to the General Fund and 20% split for DOR and ABC enforcement.

Signed by Senate Speaker
#alcoholicbeveragecommission
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WeVote Research Nonpartisan
Bill Summary · SB 2295

Summary of Bill: SB 2295 (Session 114, Tennessee)

Note: The bill text provided covers two related items in one document: a small procedural change to the Alcoholic Beverage Commission (ABC) reporting requirement, and an amended bill (HB 2172/SB 2295) establishing a new tax on inhalable liquid hemp-derived cannabinoid products (HDCPs). The following summary focuses on the content as introduced and amended in the provided materials. If only one portion is being considered, the relevant sections are clearly indicated.

1) Primary Purpose and Intent (ABC reporting provision)

  • The bill amends Tennessee Code Annotated Title 57 (Alcoholic Beverages) to modify a reporting deadline.
  • Change: The ABC must submit biennial reports on the prevention of underage drinking, drunk driving, and other harmful uses of alcohol to the members of the General Assembly by February 1 of each odd-numbered year (instead of February 15).

What this changes

  • Aligns the reporting timeline to a earlier public deadline (by 14 days), affecting how quickly the General Assembly receives the prevention-focused report.

Effective date

  • The act takes effect upon becoming law (public welfare requiring it).

2) HDCP Tax Proposal (HDCP-related provisions, SB 2295 as amended)

Note: The fiscal analysis references a broader amendment package (HB 2172/SB 2295) that would establish a new tax on inhalable liquid hemp-derived cannabinoid products (HDCPs). The key points below reflect the amended bill text and fiscal notes included.

Main purpose

  • Implement a 10 percent excise tax on the wholesale price of inhalable liquid HDCPs (e.g., disposable vape products containing hemp-derived cannabinoids), in addition to existing taxes.

Key provisions and mechanics

  • Tax rate: 10 percent of the wholesale price of HDCPs.
  • Tax base: Applies to inhalable liquid HDCPs, with examples including disposable THC vape pens or cartridges containing liquid HDCPs.
  • Revenue allocation (proposed):
    • 80 percent to the General Fund (state revenue).
    • 10 percent to the Department of Revenue (DOR) for administration and enforcement.
    • 10 percent to the Alcoholic Beverage Commission (ABC) for regulation/enforcement.
    • Any unused funds in the dedicated HDCP enforcement accounts revert to the General Fund at year-end.
  • Revenue impact estimates (illustrative, per fiscal note):
    • Estimated state revenue to DOR: about $362,900 in FY26-27 and $2,903,400 in subsequent years.
    • Estimated revenue to ABC: about $362,900 in FY26-27 and subsequent years.
    • Estimated general fund increase: about $2,903,361 in FY26-27 and subsequent years (derived from the 80% General Fund share of the tax base).
  • Market and regulatory context (as addressed in the fiscal memo):
    • HDCP market dynamics are uncertain and depend on federal definitions of hemp and regulation.
    • Legacy licenses under current Department of Agriculture (not yet transitioned to ABC licensing) complicate immediate applicability; legacy licensees are not subject to certain ABC/HDCP requirements until their current license expires (June 30, 2026) and they obtain an ABC license.
    • Guidance and alignment with federal action are pending; federal law definitions for hemp may affect state regulation and tax applicability.
  • Administrative considerations:
    • The Department of Revenue would need to issue or update guidance and reporting requirements to accommodate the new wholesale HDCP tax using existing resources.

Effective date

  • The amended provisions would take effect upon passage (subject to the act becoming law). The HDCP tax regime would coordinate with existing DOR and ABC operations.

3) Who and What Is Affected

  • Alcoholic Beverage Commission (ABC): Newly involved in HDCP regulation and enforcement; potential budget allocation of 10 percent of HDCP tax revenue.
  • Department of Revenue (DOR): Receives 10 percent of the HDCP tax revenue for administration and enforcement; would issue guidance and updates to tax reporting.
  • HDCP industry participants:
    • Inhalable liquid hemp-derived cannabinoid product manufacturers, distributors, and retailers that sell to consumers (especially disposable vape pens/cartridges containing liquid HDCPs).
    • Legacy licensees under current Department of Agriculture regulations, who may face transitional licensing requirements upon license expiration.
  • General Fund: Receives a substantial share (80 percent of the HDCP tax revenue) as part of the proposed revenue allocations.

4) Procedural and Timeline Aspects

  • ABC reporting deadline change:
    • New deadline: February 1 of each odd-numbered year.
    • Effective date: Upon becoming law.
  • HDCP tax provisions:
    • Introduction and committee actions occurred in early 2026; amendment and Senate passage occurred in April 2026.
    • The fiscal notes describe ongoing regulatory and market considerations, with an emphasis on alignment with federal hemp definitions and potential transitional licensing for legacy licensees.
    • Specific tax collection start dates and administrative implementation details would be determined by implementing regulations after enactment.

5) Fiscal Impact (Summary)

  • Overall, the HDCP tax is projected to generate modest revenue for the DOR, ABC, and the General Fund, with initial-year estimates showing hundreds of thousands of dollars annually, growing in subsequent years.
  • The fiscal notes caution that HDCP market conditions and federal definitions will influence actual revenue outcomes.
  • The ABC and legacy license considerations add regulatory complexity but are anticipated to be managed within existing agency resources.

If you’d like, I can tailor this summary to a specific audience (e.g., policymakers, industry stakeholders, or the general public) or provide a side-by-side comparison with current law.

Compiled from official sources — confirm details with the bill’s official record.

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