HB 48 – SB 368
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
March 15, 2025
Fiscal Analyst: Justin Billingsley | Email: justin.billingsley@capitol.tn.gov | Phone: 615-741-2564
HB 48 – SB 368
SUMMARY OF BILL: Eliminates the property value limit used in calculating property tax
relief payments for disabled veteran homeowners, thereby providing relief for all property taxes paid
on their residences.
FISCAL IMPACT:
Assumptions:
• Pursuant to Tenn. Code Ann. § 67-5-704, there shall be paid from the General Fund of the
state to certain disabled veterans or their eligible surviving spouses the amount necessary to
pay or reimburse such taxpayers for all or part of the local property taxes paid for a given
tax year on that property that the disabled veteran owned and used as their residence.
• Such reimbursement is paid on the first $175,000 of the full market value of such property.
• The proposed legislation removes the property value limit for upon which property tax
relief is calculated, beginning in tax year 2026.
• Given that property tax notices will be sent to taxpayers in late 2026 and paid by February
2027, the first fiscal year impact will be FY26-27.
• Based on information provided by the Comptroller of the Treasury (COT) utilizing tax
relief data for FY23-24:
o The actual amount of property tax relief for disabled veterans and surviving spouses
at the $175,000 assessed property value limit was $30,359,815;
o The total tax amount for disabled veterans and surviving spouse recipients was
$53,705,105; and
o If the total tax amount had been paid for all disabled veterans and surviving
spouses, the total expenditure would have been $23,345,290 ($53,705,105 -
$30,359,815).
STATE GOVERNMENT
EXPENDITURES General Fund
FY26-27 & Subsequent Years >$32,798,500
OTHER FISCAL IMPACT
The extent of any decrease to local government expenditures cannot be reasonably determined.
HB 48 – SB 368 2
• Based on the recent growth rate in property tax relief payments to disabled veterans and
their surviving spouses, the impact to this population has been projected forward to FY26-
27 using an annual growth rate of 12 percent in order to determine the estimated increase in
tax relief payments.
• Subsequent years would be expected to see similar growth percentages.
• Projecting the estimated property tax relief from FY23-24 for this population forward to
FY26-27 will result in $42,653,354 at the $175,000 limit and a total tax amount of
$75,451,806.
• The recurring increase in state expenditures for disabled veteran and surviving spouse
homeowners’ property tax relief from the General Fund is estimated to exceed $32,798,452
($75,451,806 - $42,653,354), beginning in FY26-27.
• Certain local governments have adopted various forms of local supplemental tax relief
programs.
• Eliminating the property value limit for disabled veterans and surviving spouses would
result in a decrease in local government expenditures for these programs, as the total
amount of relief that can be provided to such homeowners is capped at the actual tax
amount; however, the timing and extent of any permissive decrease to expenditures will
vary based on the approach and criteria for such programs.
• Any permissive decrease in local expenditures cannot reasonably be determined.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director