SB0024 • 2026

Taxes, Sales

AN ACT to amend Tennessee Code Annotated, Title 9; Title 54; Title 55 and Title 67, relative to the allocation of sales tax revenue for the highway fund.

Taxes

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: Pody, Hawk
Last action: 2026-02-18
Official status: Assigned to General Subcommittee of Senate Transportation and Safety Committee
Effective date: Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Tennessee Highway Fund Sales Tax Allocation Act

This bill changes how Tennessee allocates sales tax revenue from car and tire purchases to fund highways.

What This Bill Does

Defines 'base tax revenues' as the amount of state sales tax collected on new or used motor vehicles and tires at the end of a fiscal year.
Requires that any additional sales tax collected beyond this base amount be given to the highway fund starting July 1, 2025.
Excludes certain increases in sales tax rates from being included in the allocation to the highway fund.

Who It Names or Affects

Tennessee state government
Local governments in Tennessee
People who buy new or used cars and tires

Terms To Know

Base tax revenues: The amount of sales tax collected from car and tire purchases at the end of a fiscal year.
Highway fund: A state fund used to pay for road construction and maintenance.

Limits and Unknowns

It is unclear how much additional revenue will be generated from this change.
The bill does not specify what happens if there are no increases in sales tax beyond the base amount.

Bill History

2026-02-18 Tennessee General Assembly
Assigned to General Subcommittee of Senate Transportation and Safety Committee
2026-02-11 Tennessee General Assembly
Placed on Senate Transportation and Safety Committee calendar for 2/18/2026
2025-03-05 Tennessee General Assembly
Sponsor(s) Added.
2025-02-11 Tennessee General Assembly
Assigned to s/c Finance, Ways, and Means Subcommittee
2025-02-10 Tennessee General Assembly
P2C, ref. to Finance, Ways, and Means Committee
2025-02-06 Tennessee General Assembly
Intro., P1C.
2025-02-05 Tennessee General Assembly
Filed for introduction
2025-01-15 Tennessee General Assembly
Passed on Second Consideration, refer to Senate Transportation and Safety Committee
2025-01-14 Tennessee General Assembly
Introduced, Passed on First Consideration
2025-01-02 Tennessee General Assembly
Filed for introduction

Official Summary Text

Abstract summarizes the bill.

Current Bill Text

Read the full stored bill text

HOUSE BILL 963
By Hawk

SENATE BILL 24
By Pody

SB0024
000013
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 9;
Title 54; Title 55 and Title 67, relative to the
allocation of sales tax revenue for the highway
fund.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-6-103, is amended by adding the
following as a new subsection:
(v)
(1) As used in this subsection (v):
(A) "Base tax revenues" means the revenues generated from the
collection of state sales tax from the sale, use, consumption, distribution,
or storage for use or consumption of new or used motor vehicles and new
or used tires as of the end of the fiscal year of this state immediately prior
to the year in which the highway fund is entitled to receive an allocation of
tax revenue pursuant to this subsection (v); and
(B) "Motor vehicle" and "tire" have the same meanings as defined
in § 67-4-1602.
(2) Notwithstanding the allocations provided for in subsection (a), on July
1, 2025, and on July 1 of each subsequent year, an amount of state sales tax
received under this chapter from the sale, use, consumption, distribution, or
storage for use or consumption of new or used motor vehicles and new or used
tires in excess of base tax revenues must be allocated to and deposited in the

- 2 - 000013

highway fund in an amount equal to the incremental increase in such state sales
tax in excess of base tax revenues.
(3) Notwithstanding this subsection (v) to the contrary, no portion of the
revenue derived from the increase in the rate of sales tax allocated to
educational purposes, pursuant to chapter 529, § 9 of the Public Acts of 1992,
and no portion of the revenue derived from the increase in the rate of sales tax
from six percent (6%) to seven percent (7%), pursuant to chapter 856, § 4 of the
Public Acts of 2002, must be apportioned and distributed pursuant to this
subsection (v). The revenue must be allocated as provided in chapter 529, § 9 of
the Public Acts of 1992, and chapter 856, § 4 of the Public Acts of 2002,
respectively.
SECTION 2. This act takes effect July 1, 2025, the public welfare requiring it.