§ 4-49-104 — Taxes - Collection - Disposition of taxes

(a) It is a taxable privilege to offer sports wagering in this state under a license issued in accordance with this part. Notwithstanding another state law to the contrary, a licensee shall only pay a privilege tax on its gross handle in accordance with this section. (b) There is imposed upon the gross handle of a licensee a privilege tax of one and eighty-five one hundredths percent (1.85%). (c) The tax imposed under this section must be paid monthly by a licensee based on its gross handle for the immediately preceding calendar month, in accordance with rules promulgated by the council. A licensee may deduct from its gross handle the amount of federal excise tax paid each month, in accordance with rules promulgated by the council. A licensee shall not deduct from the gross handle winning payouts to bettors or promotional wagers or payouts. The council shall promulgate rules to specify the method by which a licensee must account for adjustments to the gross handle for wagers that are cancelled or voided and repeal all rules related to the privilege tax on adjusted gross income. (d) For the purpose of enforcing this part and ascertaining the amount of tax due under this section, the council may competitively procure the services of an outside contractor to provide a central accounting and reporting system, to ascertain all bets wagered minus the total amount paid out to winning bettors daily, and such other information as the council may require. All licensees shall utilize such central accounting and reporting system. (e) (1) Eighty percent (80%) of the privilege tax collected under this section must be distributed by the council to the state treasurer for deposit into the lottery for education account created under § 4-51-111 . (2) Fifteen percent (15%) of the privilege tax collected under this section must be distributed by the council quarterly to the state treasurer for deposit into the general fund, to be remitted quarterly to each local government in this state on a per capita basis, as determined by population based on the last federal census. For purposes of calculating the allocation, the population of counties excludes the population of each municipality within the boundaries of the county. Funds remitted to a local government under this subdivision (e)(2) must be allocated to the county or city general fund, as applicable, to be used for emergency services or local infrastructure projects, including, without limitation, transportation and road projects and public buildings. (3) Five percent (5%) of the privilege tax collected under this section must be distributed by the council to the state treasurer and allocated to the department of mental health and substance abuse services to use in the manner prescribed by § 4-49-119 .

Legislative History

Amended by 2023 Tenn. Acts, ch. 450, s 35, eff. 7/1/2023. Amended by 2023 Tenn. Acts, ch. 450, s 38, eff. 7/1/2023. Amended by 2023 Tenn. Acts, ch. 450, s 37, eff. 7/1/2023. Amended by 2023 Tenn. Acts, ch. 450, s 36, eff. 7/1/2023. Amended by 2023 Tenn. Acts, ch. 202, s 1, eff. 7/1/2023. Renumbered from T.C.A. s4-51-304by 2021 Tenn. Acts, ch. 593, s 30, eff. 1/1/2022. Amended by 2021 Tenn. Acts, ch. 593, s 27, eff. 1/1/2022. Amended by 2021 Tenn. Acts, ch. 593, s 2, eff. 1/1/2022. Added by 2019 Tenn. Acts, ch. 507, s 1, eff. 7/1/2019.