Senate Bill 1702, also known as House Bill 1893, amends Tennessee Code Annotated, specifically Section 67-6-702, regarding taxes levied by metropolitan governments. The bill modifies the definition of "city tax rate" to clarify that for cities or towns in counties that have not adopted the maximum tax rate of 2.75%, the city tax rate will be the difference between the county rate and the maximum rate. For metropolitan governments, the tax rate will be established under the previous subdivision. Additionally, the bill allows cities, towns, or metropolitan governments that have adopted a city tax rate to levy a lower tax on the retail sale of food and food ingredients or to exempt these sales from the city tax rate altogether, while still allowing for the collection of a surcharge on such sales.

The bill requires that any city or town adopting a reduced tax rate or exemption must provide a certified copy of the ordinance or resolution to the Department of Revenue. The new tax rate or exemption will take effect on the first calendar day of the month that is at least 60 days after the Department receives the certified copy, with specific effective dates for incorporated cities or towns starting on October 1, 2024, and for metropolitan governments on October 1, 2026. The act will take effect upon becoming law, emphasizing the public welfare.

Statutes affected:
Introduced: 67-6-702