Highways, Roads and Bridges - As introduced, requires 95.3970 percent, instead of 100 percent, of sales and use tax revenue generated from the sale of new or used tires to be deposited in the highway fund; adds 95.3970 percent of sales and use tax revenue generated from the sale of new or used motor vehicles to be deposited in the highway fund; requires the remaining 4.6030 percent of such revenue to be allocated to the several incorporated municipalities; allocates single article sales tax collections on the retail sale of new or used motor vehicles to the highway fund. - Amends TCA Title 4; Title 54; Title 55; Title 65 and Title 67.

114th Regular Session (2025-2026) Introduced by David Hawk

Tennessee bill redirects 95.4% of tire and vehicle sales tax revenue to highway fund, reducing municipal revenue and narrowing state budget flexibility.

Taken off notice for cal in s/c Finance, Ways, and Means Subcommittee of Finance, Ways, and Means Committee

#highways #roadsandbridges

Legislative bill overview

HB 1683 redirects sales and use tax revenue from tire and motor vehicle sales to Tennessee's highway fund instead of general state revenue. Specifically, it directs 95.3970% of tax revenue from tire and vehicle sales to highways, with the remaining 4.6030% allocated to incorporated municipalities for tire sales and establishing a dedicated single-article sales tax stream for vehicle sales going to highways.

Why is this important

Highway funding directly affects road maintenance, construction, and safety infrastructure across the state. This bill represents a significant revenue reallocation—essentially dedicating a new revenue stream to transportation infrastructure while reducing funds available for other state programs or municipal services that previously received portions of these taxes.

Potential points of contention

Municipal revenue loss: Cities lose tax revenue they previously received from vehicle and tire sales, potentially affecting local budgets for police, fire, parks, and other services

Narrow revenue dedication: Dedicating tax revenue to a specific purpose limits legislative flexibility to respond to changing state priorities or budget crises

Incomplete revenue picture: The odd percentage (95.3970%) suggests this may be a partial solution or compromise, raising questions about whether highway funding remains insufficient and what triggers this specific figure