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HB 714

Taxes, Sales - As introduced, requires the commissioner of revenue to establish a sales tax remittance schedule that allows dealers making sales to reasonably offset the burden of transaction fees associated with the collection of sales tax. - Amends TCA Title 67, Chapter 6.

114th Regular Session (2025-2026) Introduced by Charlie Baum

Tennessee bill requires revenue department to let sales tax dealers offset payment processing fees, reducing merchant collection costs.

Assigned to s/c Finance, Ways, and Means Subcommittee
#sales #taxes
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Bill Summary · HB 714

Legislative bill overview

HB 714 requires Tennessee's Department of Revenue to create a sales tax remittance schedule that allows retail dealers to offset costs associated with payment processing fees when collecting and remitting sales taxes. The bill addresses the practical reality that merchants incur transaction fees when submitting tax payments to the state.

Why is this important

Retail businesses currently bear the full cost of payment processing fees (typically 2-3% of transactions) when remitting sales taxes, which effectively reduces their profit margins. This bill seeks to level that burden by allowing dealers some mechanism to recover these costs, potentially affecting how Tennessee structures its tax collection system and competitiveness for small retailers.

Potential points of contention

  • State revenue impact: Any offset mechanism could reduce the state's net tax revenue collection, requiring clarification on how much dealers can deduct and whether this creates an effective tax reduction
  • Equity concerns: Questions about whether all businesses (online vs. brick-and-mortar, large vs. small) would benefit equally, or if the system inadvertently advantages certain business types
  • Administrative complexity: Establishing and monitoring a "reasonable offset" requires clear definitions and oversight mechanisms to prevent abuse or inconsistent application across dealers

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

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