Bill > SB0024

This bill modifies Tennessee's sales tax revenue allocation by directing additional funds to the state highway fund, specifically targeting revenue generated from sales of motor vehicles and tires. Starting July 1, 2025, the state will calculate a "base tax revenue" benchmark using sales tax collections from motor vehicles and tires as of the previous fiscal year, and then allocate any tax revenue collected above that baseline directly to the highway fund. The bill defines "motor vehicle" and "tire" using existing state code definitions and includes an important caveat that revenues from previously enacted education-related sales tax increases will not be subject to this new allocation method. This change means that as sales of vehicles and tires grow and generate more sales tax revenue than the established baseline, the excess funds will be earmarked for highway infrastructure and maintenance, potentially providing a more stable and growing funding stream for transportation infrastructure. The bill is set to take effect on July 1, 2025, giving state financial systems time to prepare for the new revenue allocation method.