Bill > HB2502

This bill amends Tennessee law to classify money transmissions originating in the state and sent to locations outside the United States or its territories as taxable service transactions, with revenues allocated to specific purposes. Specifically, it imposes a tax on these transactions, which are handled by entities licensed under the Money Transmission Modernization Act (Title 45, Chapter 7), at a rate of $10 per transaction, plus 2% on amounts exceeding $500. Importantly, these transactions are exempt from local sales taxes. The generated tax revenue will be distributed as follows: 20% to the state general fund, 51.5% to a special fund for TennCare hospital buybacks, 18.5% to a fund supporting child care initiatives, 5% to the Tennessee housing development agency for workforce housing, and 5% to a fund for paid teacher internships. The bill also clarifies how to determine the origin of such transactions within Tennessee and the destination outside the U.S. or its territories, allowing money transmitters to rely on customer-provided information and existing records. This act takes effect for rule-making purposes upon becoming law and for all other purposes on January 1, 2027.