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Committee advances bill to dedicate vehicle and tire sales taxes for recurring road funding

March 05, 2025 | Transportation and Safety, Senate, Committees, Legislative, Tennessee


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Committee advances bill to dedicate vehicle and tire sales taxes for recurring road funding
The Transportation and Safety Committee on Oct. 12 approved Senate Bill 144, which would redirect sales taxes collected from new and used motor‑vehicle sales and from tire sales toward recurring state transportation funding, and sent the measure to the finance committee for fiscal review.

Why it matters: Sponsor Senator Waller described the bill as a recurring revenue mechanism to address an estimated multibillion‑dollar backlog in road maintenance and repair; committee members repeatedly asked whether the proposal would reduce revenue available to local governments.

What the bill would do: As explained on the floor, the measure would use existing state sales‑tax receipts from motor‑vehicle and tire purchases to create a recurring funding stream for transportation maintenance and projects. Waller said the proposal would convert part of a previously proposed one‑time $1 billion item into a recurring funding mechanism and incorporate a portion of the Governor’s proposal to dedicate tire sales taxes to transportation.

Key questions and pushback: Several senators pressed for detail on how the reallocation would affect local governments’ revenue shares. Senator Briggs and Senator Campbell voiced concerns that redirecting state sales tax revenue could reduce funds flowing to cities and counties and might compel local tax increases. Waller acknowledged those concerns and told members he would provide clarifying fiscal language and an explanation to the finance committee and the committee staff.

Vote and next step: The committee adopted a technical amendment, then voted to advance the bill to the Senate finance committee (recorded as 8 ayes and 1 present‑not‑voting). The chair asked the sponsor to provide a clarification memoorandum on local‑government revenue impacts for distribution to members and finance staff.

Ending: With the bill headed to the finance committee, members signaled they expect more detailed fiscal analysis and possible adjustments there.

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