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HB 767

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 Gary Hicks

Exempts Tennessee business tax on high-cost prescription drugs exceeding 2025 Medicare thresholds and related pharmaceutical services, reducing state revenue.

Taken off notice for cal in s/c Finance, Ways and Means Subcommittee of Finance, Ways and Means Committee
#business #taxes
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Bill Summary · HB 767

Legislative bill overview

HB 767 would exempt high-cost prescription drugs and medicines from Tennessee's business tax when the 30-day supply cost exceeds Medicare's 2025 threshold. The exemption also applies to related services including drug preparation, storage, administration, patient education, and post-sale monitoring.

Why is this important

This bill directly affects pharmaceutical pricing and tax revenue. It could reduce state tax collection from high-cost drug sales while potentially lowering costs for patients and healthcare providers purchasing expensive medications. The impact depends heavily on which drugs exceed the Medicare threshold and how many Tennessee businesses sell such medications.

Potential points of contention

  • Revenue impact: The bill reduces state business tax revenue without specifying an estimated fiscal cost or replacement funding mechanism
  • Definition of "high-cost": Tying exemption to Medicare thresholds creates potential volatility as those benchmarks change annually, creating uncertainty for tax compliance
  • Scope creep: Exempting related services (preparation, storage, administration, education) is broadly defined and could be interpreted to cover numerous downstream business activities beyond the drug sale itself
  • Equity concerns: The exemption may disproportionately benefit large pharmaceutical distributors and specialty pharmacies over smaller operators, potentially shifting tax burden elsewhere
  • Implementation complexity: Determining which drugs qualify and tracking sales requires administrative oversight that may be costly to enforce

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

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