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SB 574

Taxes, Privilege - As introduced, reduces the rate of tax on bottled soft drinks and barrels of beer; changes the distribution of the revenue from such taxes; provides for the eventual repeal of such taxes. - Amends TCA Title 57, Chapter 5 and Title 67, Chapter 4.

114th Regular Session (2025-2026)

SB 574 reduces Tennessee's soft drink and beer taxes while restructuring revenue distribution and phasing out both taxes entirely.

Passed on Second Consideration, refer to Senate State and Local Government Committee
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Bill Summary · SB 574

Legislative bill overview

SB 574 reduces Tennessee's tax rates on bottled soft drinks and beer while restructuring how the resulting tax revenue is distributed among state agencies and local governments. The bill also includes provisions for the eventual complete elimination of these excise taxes.

Why is this important

These taxes generate significant revenue for state and local budgets, so reducing and eventually eliminating them affects funding for services while potentially lowering consumer prices on these beverages. The revenue redistribution component means different governmental entities will gain or lose funding based on how the diminished tax proceeds are allocated.

Potential points of contention

  • Revenue impact: Removing these taxes reduces overall state and local government revenue unless other funding sources are identified to replace it
  • Regressive taxation concern: These taxes disproportionately affect lower-income consumers who spend a larger percentage of income on beverages, so elimination may be viewed as either beneficial (tax relief) or problematic (reduced funding for services those communities depend on)
  • Distribution fairness: Changing how revenue is split between state and local governments will create winners and losers among municipalities and counties that currently benefit from these tax streams

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

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