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SB 907

Taxes, Business - As introduced, exempts from business tax, receipts from the sale of a prescription drug or medicine with a cost for a 30-day equivalent supply that exceeds the medicare cost threshold for 2025 plan years and services necessary for proper preparation, storage, handling, administration, patient education, or post-sale monitoring of such exempted drugs or medicines. - Amends TCA Title 67, Chapter 4, Part 7.

114th Regular Session (2025-2026) Introduced by Ferrell Haile

Tennessee bill exempts high-cost prescription drugs from business tax if 30-day supply exceeds Medicare's 2025 threshold, potentially reducing state revenue without guaranteed patient savings.

Placed on Senate Finance, Ways, and Means Committee calendar for 4/20/2026
#business #taxes
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Bill Summary · SB 907

Legislative bill overview

SB 907 would exempt from Tennessee's business tax any revenue generated from selling prescription drugs or medicines that exceed Medicare's 2025 cost threshold for a 30-day supply, plus associated pharmaceutical services (preparation, storage, administration, patient education, and monitoring). This targets high-cost medications by removing the business tax burden on their sale.

Why is this important

Prescription drug costs are a significant healthcare burden for many Tennesseans, and this exemption could theoretically reduce costs by eliminating the state business tax on expensive medications. However, the fiscal impact depends on how much business tax revenue the state would forgo and whether manufacturers or pharmacy chains would pass savings to patients versus retaining them as profit.

Potential points of contention

  • State revenue loss: The bill sacrifices business tax revenue without a clear estimate of the fiscal impact, potentially affecting funding for state services
  • Beneficiary uncertainty: It's unclear whether cost savings would reach patients or be retained by pharmaceutical companies and pharmacy chains
  • Threshold definition: Medicare's cost thresholds are complex and may create administrative burdens in determining which drugs qualify for exemption
  • Narrow scope: The exemption only applies to business tax, not other taxes or insurance requirements that drive drug costs, potentially offering limited real-world relief

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

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