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SB 1315

Revenue, Dept. of - As enacted, reduces from 1.125 percent to 0.75 percent the administrative fee percentage the department takes from the proceeds of the business tax, short-term rental unit occupancy tax, local tax surcharge, coal severance tax, and local option sales tax to assist in defraying the expenses of administration and collection, before remitting proceeds to the appropriate county, city, or town. - Amends TCA Title 67, Chapter 4; Title 67, Chapter 6 and Title 67, Chapter 7.

114th Regular Session (2025-2026)

Tennessee reduces state revenue administrative fees from 1.125% to 0.75% on five tax categories, directing more collected tax revenue to local governments while reducing state collection resources.

Comp. became Pub. Ch. 355
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Bill Summary · SB 1315

Legislative bill overview

SB 1315 reduces the Department of Revenue's administrative fee from 1.125% to 0.75% on five tax categories: business tax, short-term rental occupancy tax, local tax surcharge, coal severance tax, and local option sales tax. This means the state keeps a smaller percentage of collected revenues before distributing the remainder to counties, cities, and towns.

Why is this important

This change increases the amount of tax revenue that reaches local governments by approximately one-third (on the administrative portion), potentially providing more funding for county and municipal services. Conversely, it reduces state revenue available for the Department of Revenue's operations, which could affect the department's ability to administer these tax systems unless other funding sources compensate.

Potential points of contention

  • State operational impact: Reducing administrative fees may strain the Department of Revenue's budget for staffing and systems, potentially affecting tax collection efficiency or service quality
  • Local government windfall timing: The benefit to local governments depends on whether state appropriations are adjusted—if not, the state may simply reduce overall tax remittances
  • Coal severance tax equity: The inclusion of coal severance tax raises questions about whether this disproportionately benefits coal-producing regions while reducing state resources for statewide programs

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

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