Bill
HB 2433
Tennessee would exempt book sales of $100 or less during the annual July sales tax holiday, expanding the exemption while clarifying what counts as a book.
HB 2433 (Session 114, Tennessee) — Sales and Use Tax Exemption for Books During Annual Sales Tax Holiday
Overview
- Purpose: Exempt the retail sale of books from Tennessee's sales and use tax when purchased during the annual sales tax holiday (the last Friday through Sunday in July). The bill also clarifies the definition of “books” for tax purposes.
- Status/Process: Introduced in 2026, assigned to Senate Finance, Ways and Means; House sponsor is Rep. McKenzie (with Sen. Campbell as Senate sponsor). Effective date: July 1, 2026, if enacted.
What the bill would change
1) Tax exemption expansion for books
- Adds books to the items exempt from sales tax during the annual sales tax holiday, with a price cap: Books with a sales price of $100 or less per item are exempt when purchased during the holiday.
- The existing holiday exemptions remain in place for:
- Clothing, school supplies, school art supplies (each $100 or less per item)
- Computers ($1,500 or less per item)
2) Updated definition of “Books”
- Section 67-6-102(90) is amended to add a new, specific definition:
- Books are defined as a set of written or printed pages fastened on one side and enclosed between protective covers, including nonfiction, fiction, short stories, printed literary works, reference books, textbooks, and workbooks.
- Excludes newspapers, magazines, and periodicals.
3) Related code adjustments
- The bill adjusts the reference in 67-6-393(b)(1) to add the new Books item (priced at $100 or less) to the list of exemptions during the holiday.
- Section 67-6-393(b)(2) is amended to substitute the existing item E (reference maps and globes) with the new item E: Reference maps and globes (note: the text shows a renumbering/replacement; the practical effect is that reference maps and globes remain exempt, while books are added).
Effective date
- The act, if enacted, would take effect July 1, 2026.
Fiscal and economic context (from Fiscal Review Committee)
- Revenue impact is a net negative to the state and local governments during the holiday, due to the broadened exemption:
- Estimated net state revenue decrease: $338,800 (FY26-27 and onward)
- Estimated net local revenue decrease: $4,646 (FY26-27 and onward)
- Local governments will be held harmless from the loss of revenue associated with the state sales tax holidays; however, there are shifts in local vs. state-shared allocations.
- The analysis assumes:
- Books fall under the broader holiday exemption framework for certain price thresholds.
- Recreational reading materials are used as a proxy for estimating holiday impact, with staggered effects on state and local revenues.
- Half of the tax savings are assumed to be spent on other taxable goods and services, yielding modest offsetting revenue effects.
Who is affected
- Retail sellers of books in Tennessee during the annual sales tax holiday.
- Consumers purchasing books priced at $100 or less per item during the holiday.
- State and local tax revenue, with an estimated net decrease in both, and a temporary impact on local option sales tax allocations.
Key details to watch
- The specific date of the holiday remains the same (last Friday through Sunday in July) as currently defined.
- The text clarifies that newspapers, magazines, and periodicals are not included in the “books” exemption.
- Local government revenue implications depend on the state-local tax sharing arrangements and enforcement of “held harmless” provisions.
Compiled from official sources — confirm details with the bill’s official record.
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