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SB0036 • 2026

Taxes, Business

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, relative to exemption from taxes for child care agencies.

Children Taxes
Active

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

Sponsor
Campbell, Clemmons
Last action
2026-04-14
Official status
Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2026
Effective date
Not listed

Plain English Breakdown

The official source material does not provide specific details on the distribution process of funds beyond fiscal year 2023-2024, leaving some uncertainty about future allocations.

Child Care Agency Tax Exemption Act

This bill exempts child care agencies from business taxes and requires the state to annually allocate funds equivalent to the tax revenue collected in fiscal year 2023-2024 for services provided by these agencies, starting in fiscal year 2024-2025.

What This Bill Does

  • Exempts child care agencies from paying certain business taxes.
  • Requires the state to distribute an amount equal to the tax revenue collected in fiscal year 2023-2024 for services provided by child care agencies, starting in fiscal year 2024-2025.

Who It Names or Affects

  • Child care agencies that provide services and pay business taxes.
  • Counties and municipalities receiving allocated funds from the state.

Terms To Know

Business Tax
A tax charged on income or profits of a company or corporation.
Fiscal Year
A period used for calculating annual financial statements, often starting in October and ending in September.

Limits and Unknowns

  • The bill does not specify how child care agencies are defined.
  • It is unclear what happens if the amount of tax revenue from child care services changes significantly after fiscal year 2023-2024.

Bill History

  1. 2026-04-14 Tennessee General Assembly

    Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2026

  2. 2026-01-13 Tennessee General Assembly

    Action deferred in Senate Finance, Ways, and Means Committee to 2/3/2026

  3. 2026-01-05 Tennessee General Assembly

    Placed on Senate Finance, Ways, and Means Committee calendar for 1/13/2026

  4. 2025-04-14 Tennessee General Assembly

    Action deferred in Senate Finance, Ways & Means Committee to 1st Calendar of 2026

  5. 2025-02-18 Tennessee General Assembly

    Refer to Senate F,W&M Revenue Subcommittee

  6. 2025-02-12 Tennessee General Assembly

    Sponsor(s) Added.

  7. 2025-01-28 Tennessee General Assembly

    Assigned to s/c Finance, Ways, and Means Subcommittee

  8. 2025-01-27 Tennessee General Assembly

    P2C, ref. to Finance, Ways, and Means Committee

  9. 2025-01-16 Tennessee General Assembly

    Intro., P1C.

  10. 2025-01-15 Tennessee General Assembly

    Passed on Second Consideration, refer to Senate Finance, Ways & Means Committee

  11. 2025-01-14 Tennessee General Assembly

    Introduced, Passed on First Consideration

  12. 2025-01-14 Tennessee General Assembly

    Filed for introduction

  13. 2025-01-06 Tennessee General Assembly

    Filed for introduction

Official Summary Text

Abstract summarizes the bill.

Current Bill Text

Read the full stored bill text 
HOUSE BILL 156
By Clemmons

SENATE BILL 36
By Campbell

SB0036
000953
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 67,
Chapter 4, relative to exemption from taxes for
child care agencies.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-4-708(3)(C), is amended by
adding the following new subdivision:
(xvii) Child care agencies as defined in § 71-3-501.
SECTION 2. Tennessee Code Annotated, Section 67-4-708(3)(C), is amended by
deleting the language "subdivisions (3)(C)(i)-(xvi)" wherever it may appear and substituting
instead "subdivisions (3)(C)(i)-(xvii)".
SECTION 3. Tennessee Code Annotated, Section 67-4-724, is amended by adding the
following new subsection:
(e) Notwithstanding subsections (a) and (b), during the 2024-2025 fiscal year
and subsequent fiscal years, the state must annually allocate and distribute to counties
and municipalities an amount equal to the amount distributed to the counties and
municipalities in the 2023-2024 fiscal year that was derived from taxes collected under
this part for services performed by child care agencies as defined in § 71-3-501.
Notwithstanding § 67-6-103 to the contrary, the distribution required by this subsection
(e) must be made from state sales tax collections prior to distribution under § 67-6-103;
provided, however, that no portion of the revenue derived from the increase in the rate of
sales and use tax from six percent (6%) to seven percent (7%) contained in chapter 856,
§ 4 of the Public Acts of 2002 shall be distributed pursuant to this subsection (e). All

- 2 - 000953

such revenue shall continue to be allocated as provided in chapter 856 of the Public Acts
of 2002.
SECTION 4. This act takes effect upon becoming a law, the public welfare requiring it,
and applies to tax years ending on or after December 31, 2025.