WASHINGTON, D.C. – The Financial Technology Association (FTA) urges Tennessee lawmakers to amend Senate Bill 2166, legislation that would impose a tax increase on everyday Tennesseans sending money to service members, children, friends, or business partners abroad. As drafted, the legislation would impact Tennessee consumers and small businesses who use regulated, nonbank financial products to send and receive funds.
“We are concerned that this legislation imposes a new tax on Tennesseans who use regulated financial products to send money abroad,” said Sarah Mamula, Head of Government Affairs at the Financial Technology Association, who testified in opposition to the legislation. “We urge lawmakers to amend the bill to ensure parity with existing federal law by ensuring that people who use regulated digital financial services are not subject to an additional tax.”
While Senate Bill 2166 exempts almost all financial institutions, it could have impacts for regulated nonbank payment providers, including peer-to-peer payment apps and platforms that small businesses use to manage their finances. Many Tennesseans choose to use these regulated financial products because they are faster, cheaper, and easier to use. Local small businesses use cross-border payments for everyday operations, including inventory purchasing. Additionally, many community banks and credit unions in Tennessee partner directly with fintech apps to meet their customers’ needs for digital connectivity, underscoring the value of fintech products to the Tennessee economy.
Several groups raised concerns about the legislation’s impact on Tennessee taxpayers, including the Taxpayers Protection Alliance and the Tennessee Conservatives Coalition. FTA joined a local Tennessee member of the National Federation of Independent Businesses in testifying in opposition to the bill at an April 7 hearing before the Commerce and Labor Committee. The bill passed the committee by a 7-2 margin and now heads to the Finance Committee for consideration.
Read Sarah Mamula’s remarks as prepared for delivery on the unintended impact this legislation would have on everyday Tennesseans.
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The Financial Technology Association (FTA) is a network of fintech industry leaders shaping the future of finance. We champion financial innovation and advocate for policies that expand competition, access, and opportunity. Learn more at FTAssociation.org.