(27 May 2026 – United States) Tennessee is imposing a US$10 tax for cross border payments and an additional two percent of the transaction amount fee for transfers over US$500 under a law Republican Governor Bill Lee signed and takes effect next year.
The state expects to raise about US$55 million in annual revenue from the law with 16.3 million international money transmissions made from Tennessee in the 2024/25 fiscal year, valued at US$5.5 billion. Tennessee has become the second state after Oklahoma to tax cross border payments according to the Electronic Transactions Association.
Trade groups representing companies that provide cross border payment services objected to the new tax. The ETA, FTA and the American Fintech Council, representing money movement providers including Wise, Remitly, Intuit and Payoneer urged the governor to veto the measure.
Last year, President Trump signed a budget bill imposing a new one percent federal excise tax on foreign remittances paid with cash, money order or cashier’s check.
“Adding a state sales tax layer increases the cumulative burden on ordinary Tennesseans sending modest amounts to support family members, pay tuition or medical expenses, assist military relatives abroad, or fund religious and charitable activities. When formal remittances become more expensive, many respond by turning to informal or unregulated alternatives where there is little or no oversight” the groups co-wrote in a letter this month.
“This tax increase risks substantially increasing costs for Tennessee businesses and consumers while undermining access to safe, regulated financial services, We urge lawmakers to reconsider the bill’s wide-ranging consequences” commented Money Services Business Association, Executive Director, Kathy Tomasofsky.