SB 681 - HB 1009
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 21, 2025
Fiscal Analyst: Justin Billingsley | Email: justin.billingsley@capitol.tn.gov | Phone: 615-741-2564
SB 681 - HB 1009
SUMMARY OF BILL: Increases the property value threshold for determining the extent of
any property tax relief payments to disabled veterans and their surviving spouses, from $175,000 to
$250,000 of the full market value of the property.
FISCAL IMPACT:
STATE GOVERNMENT
EXPENDITURES General Fund
FY26-27 & Subsequent Years >$12,037,700
OTHER FISCAL IMPACT
The extent of any permissive impact on local government expenditures cannot be reasonably
determined.
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.
• The proposed legislation increases 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 utilizing tax relief data
for FY23-24:
o The actual amount of property tax relief for disabled veteran and surviving spouses
at the $175,000 assessed property value limit was $30,359,815; and
o The amount of property tax relief for such homeowners at the $250,000 assessed
property value limit would have been $38,928,045.
• 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.
SB 681 - HB 1009 2
• Subsequent years would be expected to see similar growth percentages.
• Projecting the estimated property tax relief from FY23-24 at each property valuation for
this population forward to FY26-27 will result in $42,653,354 of property tax relief at the
$175,000 limit and $54,691,101 of property tax relief at the $250,000 limit.
• The recurring increase in state expenditures for disabled veteran and surviving spouse
homeowners’ property tax relief from the General Fund is estimated to exceed $12,037,747
($54,691,101 - $42,653,354), beginning in FY26-27.
• Certain local governments have adopted various forms of local supplemental tax relief
programs.
• An increase to the property value limit for disabled veterans and surviving spouses could
also result in an increase or decrease (if the local government caps relief at the actual tax
amount) in local government expenditures for these programs; however, the timing and
extent of any permissive impact to expenditures will vary based on the approach and criteria
for such programs.
• Any permissive increase or 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