Tennessee Sports Gaming Act Privilege Tax: How to Record Revenues

Online sports betting became effective in Tennessee on November 1, 2020. This article provides a reminder and some updated information in relation to that guidance as counties should have received the first installment of that revenue source in January of 2021.

The Comptroller’s Office Division of Local Government Audit has amended the Uniform Chart of Accounts to add the following account for receipt of the revenue:

46855 - State Shared Sports Gaming Privilege Tax

As referenced in the statute, the funds are to be receipted into the general fund to be used for local infrastructure projects, including, without limitation, transportation and road projects, as well as public buildings. Representatives with the Comptroller’s Office Division of Local Government Audit have indicated that they will be auditing the expenditures for compliance with the uses stipulated by the statute (i.e., infrastructure projects) as opposed to the fund that they are expended from, thus creating an opportunity for county legislative bodies to allocate the revenue source to a fund other than the general fund. Should the county legislative body choose to do so, the revenue source should first be deposited into the general fund and then transferred to the applicable fund.

It is also important to note that the funds that remain unspent at the end of the fiscal year will need to be restricted per GASB 54.

Please contact your county government consultant should you have any questions.