Official Summary Text
BARREL TAX
Present law requires e
very person, firm, corporation, joint-stock company, syndicate or association in this state storing, selling, distributing, or manufacturing beer
to
pay a special privilege tax
in an amount equal to $4.29 per barrel of 31 gal
lons
stor
ed, sold, distributed by gift or sale or manufactured in this state
. However, the
rate
must
be reduced by 50¢
on July 1 of any year following the enactment of any state or federal law that imposes mandatory deposits by consumers on beverage containers sol
d in this state or on July 1, 2028, whichever occurs first.
This bill reduces the special privilege tax ("barrel tax") from $4.29 to $2 per barrel. This bill also deletes the provision that the rate must be reduced by
50¢
if certain conditions are met or
on July 1, 2028.
Allocation
Present law requires the
revenue generated from the increase in tax rates from $3.40 to $3.90
to
be allocated to the highway fund for
preventing and collecting
litter and trash.
No later than March 31 of each year, the dep
artment of transportation
must
transmit to the governor, and the speakers of the house of representatives and senate a report listing the programs receiving funds
,
the amount of funds received by each program, and the purpose for which the funds were spent.
Th
ese provisions regarding litter collection must
be repealed on July 1 of any year following the enactment of any state or federal law that imposes mandatory deposits by consumers on beverage containers sold in this state or on July 1, 2028, whichever
occurs first.
This bill reduces the special privilege tax to $2 per barrel, as described above. One of the dollars must
be allocated to the highway fund for
preventing and collecting
litter and trash
. The other dollar must be
allocated to recycling gran
ts issued by the department of environment and conservation for the purpose of funding material recycling programs
. This bill, instead, requires the
department of transportation
and
the
department of environment and conservation
to send the report.
Pr
esent law provides that the barrel tax described above is
a state tax
,
and
a
county, municipality or taxing district
does not have
power to levy any like tax.
This bill repeals these provisions
on July 1 of any year following the enactment of any state
or federal law that imposes mandatory deposits by consumers, taxes, or fees on beverage containers sold in this state or on July 1, 2028, whichever occurs first.
Collection
Present law requires t
he commissioner of revenue
("commissioner") to
supervis
e
and collec
t
the
barrel
tax.
The commissioner
must
expend so much of
4% of the amount received
under the tax
each year as may be necessary to defray the expenses arising out of the administration
of the tax. This bill adds that the commissioner must spen
d this amount to defray costs before
July 1, 2025
.
Distribution
Present law requires t
he
barrel tax to
be paid into the state treasury and
certain percentages of the proceeds be
di
stributed
in the following way:
10.05%
must be paid
to the counties equally to be used by them for general purposes
.
10.05%
must be
divided between the existing incorporated municipalities according to population to be used by them for general purposes
.
0.41%
must be
reserved and transferred to the department of mental health and substance abuse services to assist municipalities and counties in carrying out the Comprehensive Alcohol and Drug Treatment Act of 1973
.
The remainder of the tax collected
must
become a part of the general fund of the state.
This bill ends the
above distribution requirements by changing that the above distribution of the barrel tax must be paid prior to July 1, 2025.
Exemptions
Present law prohibits t
he state tax on beer and ale
from being
applicable to beer and ale sold for consumption within the geographical boundaries of a fort, base, camp or post of the armed forces of the United States, post exchanges, ship service stores, commissaries and messes operated by the United States armed fo
r
ces.
BOTTLED SOFT DRINK TAX
Present law requires a
person manufacturing or producing and selling within this state any bottled soft drinks
,
and a person importing or causing to be drinks into this state from outside the state and selling such imported
bottled soft drinks within this state
,
to
, for the privilege of engaging in such business, pay to the state for state purposes an amount equal to
1.9% of the person's gross receipts derived from such business
. However,
a person who is subject to and pays
the bottled soft drink tax is not liable for the tax on gross receipts derived from sales of bottled soft drinks outside
of
this state.
This bill reduces the tax from 1.9%
to 0.9% of the person's gross receipts derived from such business
within the state
.
As used in this law,
"bottled soft drinks" include any and all nonalcoholic beverages (which contain less than 0.5% alcohol by volume), whether carbonated or not, and all bottled preparations commonly referred to as soft drinks of whatever kind or des
cription that are closed and sealed in glass, paper, metal, plastic, or any type of container or bottle, whether manufactured with or without the use of syrup. However, fluid milk with or without flavoring, natural undiluted fruit juice or vegetable juic
e
, cider, and pure fruit juice concentrate to which no additive has been made, with only water being necessary to be added to restore the juice to its natural state, are not bottled soft drinks.
Allocation
Present law requires
revenue generated from t
he increase in tax rates from
1.5% to 1.9
% to
be allocated to the highway fund for the purpose of funding programs for the prevention and collection of litter and trash.
This bill requires of the 0.9% tax, that
0.5% of the revenue generated be allocated t
o the highway fund for
preventing and collecting
litter and trash
; and 0.
4% be allocated to recycling grants issued by the department of environment and conservation for the purpose of funding material recycling programs
.
Reporting
No later than March
31 of each year,
present law requires
the department of transportation
to
transmit to the governor, the speaker of the house of representatives and the speaker of the senate a report listing the programs receiving funds
for preventing and collecting litter
, the amount of funds received by each program, and the purpose for which the funds were spent.
This bill
, instead,
requires the department of transportation and the department of environment and conservation to send the report.
Out-of-State Sellers
Present law requires a
person located outside this state who distributes bottled soft drinks in this state
to
, for the privilege of engaging in such business, pay the tax on gross receipts derived from bottled soft drinks distributed by the person in this
state in the same manner as does a person located in this state.
A person importing or causing to be imported bottled soft drinks into this state from outside the state and selling such imported soft drinks within this state is not required to pay the ta
x, if the person's out-of-state supplier of bottled soft drinks has paid the tax
. This bill removes these provisions.
Miscellaneous
Present law requires t
he tax
to
be administered and collected by the commissioner
of revenue. This bill removes this p
rovision.
Present law requires the bottled soft drink tax
to
be repealed on July 1 of any year following the enactment of any state or federal law that imposes mandatory deposits by consumers on beverage containers sold in this state or on July 1, 2028,
whichever occurs first.
This
bill, instead, requires such
a
repea
l
on July 1 of any year following an
enactment of any state or federal law that imposes mandatory deposits by consumers, taxes, or fees on beverage containers or sold in this state or on Ju
ly 1, 2028, whichever occurs first.
Current Bill Text
Read the full stored bill text
SENATE BILL 574
By Powers
HOUSE BILL 521
By Reedy
HB0521
002196
- 1 -
AN ACT to amend Tennessee Code Annotated, Title 57,
Chapter 5 and Title 67, Chapter 4, relative to the
taxation of certain beverages.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 57-5-201(a)(1), is amended by
deleting the language:
Every person, firm, corporation, joint-stock company, syndicate or association in
this state storing, selling, distributing, or manufacturing such beer or other
beverages as are described in this chapter shall pay a special privilege tax, in
addition to all other taxes, in an amount equal to four dollars and twenty-nine
cents ($4.29) per barrel of thirty-one liquid gallons (31 gals.) stored, sold,
distributed by gift or sale or manufactured in this state; provided, that the rate
shall be reduced by fifty cents (50¢) on July 1 of any year following the
enactment of any state or federal law that imposes mandatory deposits by
consumers on beverage containers sold in this state or on July 1, 2028,
whichever occurs first.
and substituting instead:
Every person, firm, corporation, joint-stock company, syndicate, or association in
this state storing, selling, distributing, or manufacturing such beer or other
beverages as are described in this chapter shall pay a special privilege tax, in
addition to all other taxes, in an amount equal to two dollars ($2.00) per barrel of
thirty-one liquid gallons (31 gals.) stored, sold, distributed by gift or sale, or
manufactured in this state.
- 2 - 002196
SECTION 2. Tennessee Code Annotated, Section 57-5-201(a)(2), is amended by
deleting the subdivision and substituting instead:
(2) Notwithstanding this section or another law to the contrary, one dollar ($1.00)
of the revenue generated from the special privilege tax authorized in subdivision (a)(1)
shall be allocated to the highway fund for the purpose of funding programs for the
prevention and collection of litter and trash and matters related to the programs,
including special grants for programs described in § 54-1-407.
(3) One dollar ($1.00) of the revenue generated from the special privilege tax
authorized in subdivision (a)(1) must be allocated to recycling grants issued by the
department of environment and conservation for the purpose of funding material
recycling programs, including aluminum, plastic, glass, and other recyclable materials.
(4) No later than March 31 of each year, the department of transportation and
department of environment and conservation shall transmit to the governor and the
speakers of the house of representatives and senate a report listing the programs
receiving funds generated by this subsection (a), the amount of funds received by each
program, and the purpose for which the funds were spent.
(5) This subsection (a) and subsection (b) are repealed on July 1 of any year
following the enactment of any state or federal law that imposes mandatory deposits by
consumers, taxes, or fees on beverage containers sold in this state or on July 1, 2028,
whichever occurs first.
SECTION 3. Tennessee Code Annotated, Section 57-5-202(a), is amended by deleting
the language "The commissioner shall expend so much of four percent (4%)" in the
second sentence and substituting instead the language "Prior to July 1, 2025, the
commissioner shall expend so much of four percent (4%)".
- 3 - 002196
SECTION 4. Tennessee Code Annotated, Section 57-5-205, is amended by deleting the
language "The state privilege tax collected under §§ 57-5-201 -- 57-5-204" and
substituting instead the language "Prior to July 1, 2025, the state privilege tax collected
under §§ 57-5-201 -- 57-5-204".
SECTION 5. Tennessee Code Annotated, Section 67-4-402(b), is amended by deleting
the subsection and substituting instead:
(1) Imposition of Tax. A person manufacturing or producing and selling within
this state any bottled soft drinks and a person importing or causing to be imported
bottled soft drinks into this state from outside the state and selling such imported bottled
soft drinks within this state shall, for the privilege of engaging in such business, pay to
the state for state purposes an amount equal to nine-tenths percent (0.9%) of the
person's gross receipts derived from such business.
(2)
(A) Notwithstanding this section or another law to the contrary:
(i) Five-tenths percent (0.5%) of the revenue generated from the
special privilege tax authorized in subdivision (b)(1) must be allocated to
the highway fund for the purpose of funding programs for the prevention
and collection of litter and trash and matters related to the programs,
including special grants for programs described in § 54-1-407; and
(ii) Four-tenths percent (0.4%) of the revenue generated from the
special privilege tax authorized in subdivision (b)(1) must be allocated to
recycling grants issued by the department of environment and
conservation for the purpose of funding material recycling programs,
including aluminum, plastic, glass, and other recyclable materials.
- 4 - 002196
(B) No later than March 31 of each year, the department of transportation
and department of environment and conservation shall transmit to the governor
and the speakers of the house of representatives and senate a report listing the
programs receiving funds generated by this subsection (b), the amount of funds
received by each program, and the purpose for which the funds were spent.
SECTION 6. Tennessee Code Annotated, Section 67-4-402, is amended by adding the
following new subsection:
(e) This section is repealed on July 1 of any year following the enactment of any
state or federal law that imposes mandatory deposits by consumers, taxes, or fees on
beverage containers or sold in this state or on July 1, 2028, whichever occurs first.
SECTION 7. The Tennessee Code Commission is directed to delete references to the
taxes repealed by this act, when such repeal occurs.
SECTION 8. This act takes effect on July 1, 2025, the public welfare requiring it.