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| 8 | 8 | | |
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| 9 | 9 | | HB0842 |
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| 10 | 10 | | 003003 |
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| 11 | 11 | | - 1 - |
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| 12 | 12 | | |
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| 13 | 13 | | AN ACT to amend Tennessee Code Annotated, Section |
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| 14 | 14 | | 67-4-409, relative to taxes on transfers of realty. |
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| 15 | 15 | | |
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| 16 | 16 | | WHEREAS, for many years, this State has imposed a tax of $0.37 per $100 of value for |
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| 17 | 17 | | the privilege of publicly recording documents evidencing all transfers of realty, whether by deed, |
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| 18 | 18 | | court deed, decree, partition deed, or other instrument evidencing transfer of any interest in real |
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| 19 | 19 | | estate; and |
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| 20 | 20 | | WHEREAS, although this tax is collected locally, it is currently remitted to the State, and |
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| 21 | 21 | | the revenue is not made available for use by local officials to address needs in the community |
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| 22 | 22 | | where the tax is collected; and |
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| 23 | 23 | | WHEREAS, county governments have few revenue options available to them for funding |
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| 24 | 24 | | the many crucial governmental services mandated by state law and are therefore largely |
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| 25 | 25 | | dependent upon property tax to fund these services; and |
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| 26 | 26 | | WHEREAS, county governments have been fiscally disciplined, allowing Tennessee to |
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| 27 | 27 | | remain a low property tax burden state; however, county budgets are increasingly strained by |
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| 28 | 28 | | factors such as inflation, challenges in recruiting and retaining qualified staff, and requirements |
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| 29 | 29 | | to meet state mandates like increasing teacher compensation; and |
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| 30 | 30 | | WHEREAS, many counties are experiencing rapid population growth as families are |
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| 31 | 31 | | choosing to move to Tennessee and settle in its communities, adding to the demand for county |
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| 32 | 32 | | services and infrastructure which are necessary to maintain the quality of life all Tennesseans |
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| 33 | 33 | | expect and deserve; and |
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| 34 | 34 | | WHEREAS, as the State continues to experience revenue collections in excess of |
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| 35 | 35 | | budgeted estimates, allocating one-half of the real estate transfer tax on a recurring basis to the |
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| 36 | 36 | | |
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| 37 | 37 | | |
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| 38 | 38 | | - 2 - 003003 |
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| 39 | 39 | | |
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| 40 | 40 | | county where collected would take pressure off local property taxes and allow for investment in |
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| 41 | 41 | | infrastructure and services without unduly burdening state finances and without increasing the |
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| 42 | 42 | | rate of this tax; now, therefore, |
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| 43 | 43 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE: |
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| 44 | 44 | | SECTION 1. Tennessee Code Annotated, Section 67-4-409(d), is amended by adding |
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| 45 | 45 | | the following as a new subdivision: |
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| 46 | 46 | | (4) Notwithstanding another law and except for commissions and fees retained |
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| 47 | 47 | | as otherwise provided in subdivisions (d)(2) and (3), and except for the credit of realty |
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| 48 | 48 | | transfer tax revenues to specific accounts or funds in accordance with subsections (g), |
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| 49 | 49 | | (i), (j), (l), and (m), the department shall remit back to each county, respectively, fifty |
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| 50 | 50 | | percent (50%) of the recordation taxes on the transfer of realty levied under subsection |
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| 51 | 51 | | (a) that are collected by county registers and remitted to the department, based on the |
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| 52 | 52 | | total amount of such taxes remitted to the department by county. |
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| 53 | 53 | | SECTION 2. This act takes effect July 1, 2025, and applies to transfers of real property |
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| 54 | 54 | | on or after such date, the public welfare requiring it. |
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