TennesseeTennessee will tax some money transfers sent abroad
Starting January 1, 2027, licensed money transmitters pay a state tax on certain transfers sent from Tennessee to destinations outside the United States.
What it does
Starting January 1, 2027, the state taxes certain transfers sent abroad through licensed money transmitters. The tax is $10 per transfer, plus 2% of any amount over $500.
Each month, tax revenue is divided among the general fund, hospital buybacks, child care support, workforce housing, and paid internships for teachers in training.
Providers use the request location or customer records to decide whether a covered transfer starts in Tennessee and goes abroad.
Argument forTax revenue could help fund hospital buybacks, child care support, workforce housing, and paid internships for teachers in training.
Argument againstThe $10 charge could take a larger share from people sending small amounts, because it applies to each covered transfer.
More detail
Money sent abroad through a covered provider is taxed by the state. The tax covers money sent from a location in Tennessee to a location outside the United States or its territories through an entity licensed under the Money Transmission Modernization Act. The tax is $10 per transfer, plus 2% of the amount over $500 when a transfer exceeds $500. Transfers by financial institutions defined in state law are exempt, except when the institution is licensed under the Money Transmission Modernization Act. These transfers are exempt from local option tax. The tax takes effect January 1, 2027. Rules and forms for carrying it out may take effect when the law takes effect.
The state distributes the tax revenue among public funds and agencies. Each month, revenue goes to the state general fund, hospital buybacks, child care efforts, workforce housing, and paid internships for teachers in training at public schools, including charter schools. The child care money supports pilot programs and targeted help for working families who cannot get existing subsidies, along with child care workforce and employer cost-sharing efforts. Money deposited in the special accounts stays there until spent on the stated purposes and does not return to the general fund. Monthly distributions apply when the tax takes effect on January 1, 2027.
Money transmitters determine where a covered transfer starts and where it is received using customer information and records. These location rules apply to transfers covered by the state tax. For an in-person request, the starting location is where the request is made in Tennessee. For an online or phone request, the provider determines the starting location using customer information and records, such as an account address. Providers may use customer information and records to determine whether the recipient is outside the United States or its territories. These rules take effect January 1, 2027.
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Where it stands
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- May 27Pub. Ch. 1035Latest
- May 27Effective date(s) 05/21/2026, 01/01/2027
- May 21Signed by Governor Bill Lee.Became Law
- May 11Transmitted to Governor for his action.To Governor
- May 5Signed by Senate SpeakerMajor
- Apr 30Signed by H. SpeakerMajor
- Apr 28Enrolled; ready for sig. of H. Speaker.Minor
- Apr 22H. concurred in S. am. no. 2 Ayes 70, Nays 19 PNV 2 HB2502
- Vote recorded FLOOR VOTE: MESSAGE CALENDAR CONCUR IN SENATE AMENDMENT # 2 4/22/2026 Passed. Result: pass.Lower
- Apr 20H. Placed on Message Calendar for 4/21/2026
- Apr 16Senate substituted House Bill for companion Senate Bill.Major
- Vote recorded FLOOR VOTE: as Amended Third Consideration 4/16/2026 Passed. Result: pass.Upper
- Apr 16Amendment withdrawn. (Amendment 1 - SA1013)
- Apr 16Senate adopted Amendment (Amendment 2 - SA1038)
- Apr 16Passed Senate as amended, Ayes 21, Nays 7Passed Senate
- Apr 13Received from House, Passed on First ConsiderationMinor
- Apr 9H. adopted am. (Amendment 1 - HA0729)Major
- Vote recorded FLOOR VOTE: REGULAR CALENDAR PREVIOUS QUESTION AS AMENDED PASSAGE ON THIRD CONSIDERATION 4/9/2026 Passed. Result: pass.Lower
- Vote recorded HOUSE CALENDAR & RULES COMMITTEE: H. Placed on Regular Calendar for 4/9/2026 4/2/2026. Result: fail.Lower
- Vote recorded FLOOR VOTE: REGULAR CALENDAR AS AMENDED PASSAGE ON THIRD CONSIDERATION 4/9/2026 Passed. Result: pass.Lower
- Apr 9Sponsor(s) Added.Minor
- Apr 9Passed H., as am., Ayes 68, Nays 21, PNV 3Passed House
- Apr 9Engrossed; ready for transmission to Sen.Minor
- Apr 2H. Placed on Regular Calendar for 4/9/2026
- Apr 1Placed on cal. Calendar & Rules Committee for 4/2/2026
- Mar 31Rec. for pass; ref to Calendar & Rules CommitteeMinor
- Vote recorded HOUSE FINANCE, WAYS, AND MEANS COMMITTEE: Rec. for pass; ref to Calendar & Rules Committee 3/31/2026 Passed. Result: pass.Lower
- Mar 25Rec. for pass by s/c ref. to Finance, Ways, and Means CommitteeMinor
- Vote recorded HOUSE FINANCE, WAYS, AND MEANS SUBCOMMITTEE: Rec. for pass by s/c ref. to Finance, Ways, and Means Committee 3/25/2026 Passed. Result: pass.Lower
- Mar 25Placed on cal. Finance, Ways, and Means Committee for 3/31/2026
- Mar 18Rec. for pass. if am., ref. to Finance, Ways, and Means CommitteeMinor
- Vote recorded HOUSE COMMERCE COMMITTEE: Rec. for pass. if am., ref. to Finance, Ways, and Means Committee 3/18/2026 Passed. Result: pass.Lower
- Mar 18Assigned to s/c Finance, Ways, and Means SubcommitteeMinor
- Mar 18Placed on s/c cal Finance, Ways, and Means Subcommittee for 3/25/2026
- Mar 11Rec for pass if am by s/c ref. to Commerce CommitteeMinor
- Vote recorded HOUSE BANKING AND CONSUMER AFFAIRS SUBCOMMITTEE: Rec for pass if am by s/c ref. to Commerce Committee 3/11/2026 Passed. Result: pass.Lower
- Mar 11Placed on cal. Commerce Committee for 3/18/2026
- Mar 9Sponsor(s) Added.Minor
- Mar 4Action Def. in s/c Banking and Consumer Affairs Subcommittee to 3/11/2026
- Mar 4Placed on s/c cal Banking & Consumer Affairs Subcommittee for 3/11/2026
- Feb 25Placed on s/c cal Banking & Consumer Affairs Subcommittee for 3/4/2026
- Feb 5P2C, ref. to Commerce Committee - Finance, Ways & Means CommitteeMinor
- Feb 5Assigned to s/c Banking & Consumer Affairs SubcommitteeMinor
- Feb 4Intro., P1C.Minor
- Feb 3Filed for introductionIntroduced
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