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State-Shared Sales Tax

Reference Number: MTAS-1875
Reviewed Date: 12/20/2021

Revenue Class: Intergovernmental Revenue

Fund: General

Account No.: 33510

Description: The Retailers’ Sales Tax is applied to the sale, use, consumption, distribution, lease, or rental of tangible personal property and selected services, of which cities receive a population-based share of a portion of the total statewide collections. Additional money is available to cities that have sports authorities that have secured professional major league baseball, football, basketball or hockey franchises. Premier type tourist resorts that meet specified requirements (i.e., golf courses, ski slopes, theme parks, etc.) are entitled to additional distributions per T.C.A. § 67-6-103 (a)(3)(B).

Authorization: T.C.A. § 67-6-101 et seq.

Requirements or Restrictions: Municipalities may conduct only four special censuses after the decennial census to increase their population-based share. T.C.A. § 67-6-103(a)(3)(C) and (D). Special options exist for “premiere type tourist resort” cities, cities that have a major league sports team, and others as noted in T.C.A.

Current Rate: 99 percent of 4.6030 percent of 6 percent of the statewide 7 percent sales tax (which equates to 4.55697%). The 1 percent (which equates to 0.04603%) is retained by the state and sent to the University of Tennessee to partially fund the Municipal Technical Advisory Service (MTAS).  For example, if the state collected $1 million in sales tax, MTAS would receive $418.46, and cities would split $45,569.70 based on population.

Frequency of Payment: Monthly

Late Pay Penalty: N/A

Exemptions: Revenues from fuel sales used for aviation, railways or water carriers are placed in the transportation equity fund.

Collection: Revenue is distributed monthly by the state.

Use Restrictions: None