HB1650 - Tennessee

• Companion Bill SB0097.
  

  Taxes, Sales - Provides a food sales tax holiday the first weekend of each month. - Amends TCA Title 67, Chapter 6.

  Fiscal Summary for HB1650 / *SB0097

  Decrease State Revenues - $15,306,000 / General Fund - FY07-08 $34,328,000 / Education Fund - FY07-08 $2,422,000 / Earmarked to Local Govt. - FY07-08 $194,000 / Department of Revenue - FY07-08 $485,000 / Sinking Fund - FY07-08 $52,735,000 - Total Net Decrease - FY07-08 $31,377,000 / General Fund - FY08-09 $70,372,000 / Education Fund - FY08-09 $4,965,000 / Earmarked to Local Govt. - FY08-09 $398,000 / Department of Revenue - FY08-09 $994,000 / Sinking Fund - FY08-09 $108,106,000 - Total Net Decrease - FY08-09 Increase State Expenditures - $19,775,000 - FY07-08 / General Fund $40,539,000 - FY08-09 / General Fund $100,000 One-Time Decrease Local Govt. Revenues - $2,422,000 - FY07-08 $4,965,000 - FY08-09

  
  Bill Summary for HB1650 / *SB0097
  
  This bill creates a monthly sales tax holiday on food and food ingredients for human consumption. The holiday would begin 12:01 a.m. on the first Friday of every month and end 11:59 p.m. on the following Sunday.
  
  This bill's sales tax exemption would be subject to the following:
  
  (1) Purchases with a "rain check" will qualify for the exemption, no matter when the rain check was issued, if the purchase transaction takes place during the holiday;
  (2) Delivery charges would not be exempt;
  (3) In regard to order dates and back orders, the exemption would apply if:
  
  (A) The food is delivered to and paid for by the customer during the exemption period; or
  (B) The customer orders and pays for the food and the seller accepts the order during the holiday for immediate shipment, even when delivery occurs after the holiday due to reasons other than the customer requesting delayed delivery; and
  
  (4) For a seven-day period immediately after the sales tax holiday weekend no credit or refund for sales tax will be given when a customer returns a food item, unless the customer provides a receipt, or there is other documentation, that shows tax was paid.
  
  This bill requires the commissioner of revenue to substantially reimburse local governments for the loss of local tax resulting from the sales tax exemption. Reimbursement would be based on the amount of local tax that would have been collected in the city or county had the exemption not been in effect. Reimbursement would be made from state sales tax revenue prior to any distribution of such revenue as provided for under present law (T.C.A. Section 67-6-103).