The Tennessee General Assembly is set to pass this year’s budget, its only constitutional requirement, later this week. They are expected to go “sine die” next week and head home for the summer primary elections.

NFIB will provide a full recap after adjournment, but here’s what we’re tracking closely at the end of session:

Regulatory Freedom Act Advancing

At this writing, the House of Representatives was set to consider HB 1913 by NFIB member Rep. Clark Boyd (Lebanon) on the House floor Monday.

The legislation would require state agencies to obtain feedback from the community they’re seeking to regulate so agencies, lawmakers and impacted businesses understand the true cost of proposed rules and regulations.

Additionally, any proposed agency rule estimated to have a negative fiscal impact exceeding $1 million over five years would have to be voted on by the full General Assembly as a separate bill rather than in the omnibus rules bill.

The bill also would require state agencies to report annually the cumulative cost of their new/amended rules and regulations to provide transparency of regulatory costs to our state’s economy.

Finally, this bill gives more legislative oversight on emergency rules & regulations, ensuring ultimate decision-making rests with our elected officials instead of with the regulatory community.

SB 2199, the Senate companion, is co-sponsored by Sen. Adam Lowe (Calhoun), Senate Majority Leader Jack Johnson (Franklin), an NFIB member, and others. It should be on the Senate floor soon.

Tax Reform Efforts Stall

SB 32/HB 477 which sought to align Tennessee’s bonus depreciation rate with the current federal level of 100 percent in the One Big Beautiful Bill Act (OBBBA), did not advance. The legislation would allow businesses to immediately deduct the cost of qualifying capital investments, supporting expansion, job creation, and economic growth.

Conforming to the federal provision would reduce complexity, strengthen the manufacturing base, and ensure Tennessee remains attractive for new and expanding businesses compared to neighboring states that already follow the federal rate. We will renew efforts in 2027.

Tax Increase on Small Business Passes

HB 2502, which would newly classify money transmissions from Tennessee to locations outside the U.S. as taxable service transactions under the state sales and use tax, overwhelmingly passed the House last Thursday. Last week, the Senate version advanced in the Senate Commerce & Labor Committee by a 7-2 vote, despite NFIB testimony outlining a number of concerns. It is on the Senate Finance, Ways and Means Committee’s calendar this week.

The legislation would establish a new tax of 2% on money transmissions from Tennessee to overseas entities, which includes global B2B transactions. Financial institutions have been exempted after originally being considered in a House version last month, essentially creating winners (banks) and losers (180 licensed money transmitters in TN).

Small businesses often use “fintech” money transfer providers instead of banks because they get lower foreign exchange rates, faster delivery, simpler onboarding and fewer wire-related fees. The legislation signals an unprecedented shift toward taxing essential business services and is contradictory to our well-deserved reputation as a pro-business state. It also would put our state at a competitive disadvantage with other states that don’t have this tax (only Oklahoma has a similar law, adopted in 2009).

Revenue collected would be directed through new funds to TennCare hospital buybacks, child-care assistance initiatives and other programs.