WASHINGTON, D.C. – The Financial Technology Association (FTA) issued the following statement on Tennessee House Bill 2502, a broad, sweeping new tax on consumers and businesses sending money abroad. The legislation was passed by the Tennessee legislature earlier this month and signed into law today.
“Tennesseans shouldn’t face new taxes when sending money to friends, family, business partners, or suppliers abroad, or when making charitable donations,” said Penny Lee, President and CEO of the Financial Technology Association. “This law raises taxes on Tennessee consumers, businesses, and non-profits, and contradicts recently passed federal law while also running afoul of the Foreign Commerce Clause in the U.S. Constitution.”
As enacted, Tennessee HB 2502 imposes a $10 fee per transaction for transactions under $500 and an additional 2% fee on international money transmissions originating in Tennessee that exceed $500. The tax unfairly discriminates against transactions processed by money transmitters, as it applies only to funds processed by those entities, not to those processed by other financial institutions, including banks. It will levy an additional tax on everyday Tennesseans – including military families, students, small businesses, and religious organizations – on money they’ve already paid taxes on.
Main Street businesses, conservative leaders, and faith-based groups have spoken out against a tax that would harm Tennessee residents and businesses. The Taxpayer Protection Alliance urged Tennessee lawmakers to reject this harmful and costly bill. Americans for Tax Reform similarly called on the Governor to reject the legislation. FTA previously urged Tennessee lawmakers to amend the bill and joined several other trade associations in calling on the Governor to veto it.
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