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SB 2684

Taxes, Sales - As introduced, changes the date, from February 1 to February 15, by which the department of revenue must submit its annual report regarding information and findings and any recommendations concerning sales taxes the department collects on the sale of electronic nicotine delivery devices to the speaker of the senate, speaker of the house of representatives, and chairs of the finance, ways and means committees of the senate and house of representatives. - Amends TCA Title 67, Chapter 6.

114th Regular Session (2025-2026) Introduced by Raumesh Akbari

Extends ENDS tax study report deadline to February 15, 2030 and creates a temporary sales tax exemption for qualified building materials on large manufacturing capital investments.

Placed on Senate Finance, Ways, and Means Committee calendar for 4/20/2026
#sales #taxes
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Bill Summary · SB 2684

Summary of SB 2684 (HB 2589) — Tennessee, 114th General Assembly

Note: This summary reflects the bill as introduced and as amended, based on the legislative text and fiscal notes provided.

1) Purpose and intent

  • The bill makes two distinct changes to Tennessee tax law: 1) It adjusts the deadline by which the Department of Revenue must submit its annual report on information, findings, and any recommendations concerning the sales taxes the department collects on the sale of electronic nicotine delivery devices (ENDS). Specifically, it changes the due date from February 1 to February 15 of each year, and extends this annually through February 15, 2030. 2) It establishes a temporary sales and use tax exemption for qualified building materials used in certain capital investments in manufacturing facilities, with an accompanying framework for eligibility and administrative reporting. This portion is described in the fiscal note and amended summary as part of a broader tax exemption program.

2) Key provisions and changes

A. Report deadline for ENDS sales tax study

  • Amends TCA Title 67, Chapter 6, Section 67-6-106.
  • Change: The Department of Revenue must submit its annual report to the speaker of the Senate, the speaker of the House, and chairs of the Finance, Ways and Means committees of both chambers by February 15 of each year, instead of February 1.
  • Effective period for the deadline change: Until February 15, 2030.
  • Rationale likely to provide more time for data collection and analysis, without altering the substantive reporting requirements.

B. Expanded tax exemption framework for qualified capital investments (as amended in fiscal analysis)

  • The fiscal notes describe an amended portion establishing a sales and use tax exemption on qualified building materials used in real property comprising a manufacturing facility.
  • Eligibility baseline:
    • A taxpayer or lessee must make a capital investment of at least $60,000,000 in the construction, expansion, or renovation of the facility.
    • The exemption applies to qualified building materials purchased during a defined “qualified capital investment period” from July 1, 2026, through December 31, 2032.
  • Application timing:
    • Applicants must file for the exemption prior to January 1, 2032.
  • This section introduces a capstone period for the exemption and outlines administrative requirements for claiming the exemption.

Note: The fiscal memorandum presents a broader exemption framework (qualified building materials and a defined investment period) that aligns with substantial capital projects in manufacturing facilities. The primary legislative text provided focuses on the ENDS reporting deadline; the fiscal note indicates an accompanying exemption regime being considered or amended in tandem.

3) Who is affected

  • Tennessee Department of Revenue:
    • Responsible for preparing and submitting the annual ENDS-related report by the new February 15 deadline through 2030.
  • Legislators and legislative staff:
    • Those receiving or reviewing the ENDS report (speaker of the Senate, speaker of the House, and chairs of the Finance, Ways and Means committees).
  • Businesses engaged in manufacturing facility construction, expansion, or renovation:
    • Potential buyers of qualified building materials for projects meeting the $60,000,000 investment threshold.
    • Potential applicants for the sales and use tax exemption during the qualified capital investment period (July 1, 2026 – December 31, 2032).
  • Local governments:
    • Foregone revenue estimates are provided in the fiscal note, indicating that local tax revenues would be affected under the exemption framework.

4) Procedural and timeline aspects

  • ENDS report deadline:
    • Change effective immediately upon law; deadline moved from February 1 to February 15 each year through February 15, 2030.
  • Qualified capital investment exemption:
    • Period for exemption applicability: July 1, 2026, to December 31, 2032.
    • Application deadline for exemption: Prior to January 1, 2032.
  • Effective date:
    • The bill states it takes effect upon becoming law (immediate effect for the reporting deadline change; exemption framework would follow its own schedule per the amended fiscal notes).

5) Fiscal impact (as indicated in fiscal notes)

  • ENDS reporting deadline change:
    • The fiscal note indicates a "not significant" impact on state or local government operations.
  • Qualified capital investment exemption (amended provisions):
    • State revenue foregone: Estimated totals ranging from approximately $101,200 in FY26-27 to $506,000 in certain years, with corresponding local revenue foregone estimates.
    • Cumulative estimated foregone revenue over the period appears to be substantial but framed as part of the capital investment incentive program.
  • These figures are estimates and subject to project activity and uptake of the exemption.

6) Legislative history and sponsors

  • Introduced: 2026, with cross-bill HB 2589
  • Primary sponsor: (Senate) Akbari; (House) Chism
  • Co-sponsor: Raumesh Akbari
  • Status updates indicate passage through committees and scheduling in the Senate Finance, Ways and Means Committee in April 2026.

If you’d like, I can provide a plain-language briefing for policymakers, a side-by-side comparison with current law, or a brief FAQ addressing common questions about the ENDS reporting deadline and the proposed capital investment tax exemption.

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

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