State Tax Day - Current, S.10, Tennessee—Sales and Use Tax: Tax Imposed on Money Transmission Services, (Jun 1, 2026)

Tennessee enacted a law imposing sales tax on the service of transmitting money from a location originating in the state to a location outside of the United States or its territories, effective January 1, 2027. The sales tax applies only to entities licensed under the Tennessee Money Transmission Modernization Act.

Rate. The tax rate is $10 per transaction. If the amount of money transmitted per transaction exceeds $500, an additional 2% tax applies to the amount transmitted in excess of $500.

Sourcing. Sales are deemed to originate in Tennessee when: (1) for a transaction requested in person, the physical location where the in-person request is made is within Tennessee; and (2) for a transaction requested electronically or by phone, the physical location associated with the customer who transmitted the money is in Tennessee, as determined by the provider of the money transmission.

To determine whether money is being transmitted to a location outside the United States or its territories, the provider may rely on customer-supplied recipient address information or account records showing a foreign location.

Local sales tax. The service of transmitting money from a location originating in Tennessee to a location outside of the United States or its territories is not subject to the local option sales tax.

Exempt entities. The transmission of money by any corporation defined as a financial institution is exempt from the tax, unless the entity is also licensed under the Tennessee Money Transmission Modernization Act.

Ch. 1035 (H.B. 2502), Laws 2026, effective January 1, 2027; Notice 26-12, Tennessee Department of Revenue, May 2026