HB 649 - SB 1080
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
March 27, 2025
Fiscal Analyst: Elizabeth Bransford | Email: elizabeth.bransford@capitol.tn.gov | Phone: 615-741-2564
HB 649 - SB 1080
SUMMARY OF BILL: Allocates, before all other distributions, 50 percent of the revenue
generated from the realty transfer tax to counties to be used for infrastructure, debt service for
capital projects, matching funds for state and federal projects, and other nonrecurring expenses.
Requires counties to dedicate at least 50 percent of their allocation to transportation infrastructure
projects. Prohibits counties from using their allocation to supplant their state or local appropriated
or other allocated moneys for infrastructure.
FISCAL IMPACT:
STATE GOVERNMENT
REVENUE General Fund
FY25-26 & Subsequent Years ($141,069,600)
LOCAL GOVERNMENT
REVENUE Mandatory
FY25-26 & Subsequent Years $141,069,600
Assumptions:
• Pursuant to Tenn. Code Ann. § 67-4-409(a), $0.37 per $100 tax is collected on all transfers
of realty, whether by deed, court deed, decree, partition deed, or other instrument
evidencing transfer of any interest in real estate.
• Total realty transfer tax collections were $257,614,236 in FY23-24.
• Fiscal Review Committee staff’s estimates for privilege tax growth are 3.84 percent in
FY24-25 and 5.47 percent in FY25-26.
• Total realty transfer tax collections in FY25-26 are estimated to be $282,139,235
($257,614,236 x 1.0384 x 1.0547). For the purposes of this fiscal analysis, this number is
assumed to remain constant into perpetuity.
• Pursuant to Tenn. Code Ann. § 67-4-409(d)(2), for collecting and reporting the realty
transfer tax, county registers shall be entitled to retain as commission 5.0 percent of
collected taxes. Of the 5.0 percent commission, counties will retain 48 percent of the
commission and 52 percent will go to the state General Fund.
• Additionally, of the $0.37 per $100 realty transfer tax, after other allocations, remaining
collections are remitted as follows:
o $0.0325 to the Wetland Acquisition Fund;
o $0.0175 to the Local Parks Land Acquisition Fund;
HB 649 - SB 1080 2
o $0.015 to the State Lands Acquisition Fund; and
o $0.015 to the Agricultural Resources Conservation Fund;
o Any remaining collections to the General Fund.
• The proposed legislation requires the Department of Revenue to return to each respective
county 50 percent of the amount of realty transfer tax it collected and remitted to the state.
It further requires the 5.0 percent commission to be deducted from the remaining 50
percent of collections; however, allocations to the various state funds above, other than the
General Fund, must not be impacted.
• Allocations to the above state funds, other than the General Fund, will not be impacted
pursuant to the language of the legislation as well as because they are based on fixed dollar
amounts rather than a percentage of total collections, and collections remaining after the
allocations under the proposed legislation are sufficient to continue the allocations to the
above funds.
• Additionally, collections and allocations pursuant to the 5.0 percent commission will not be
impacted.
• However, under the proposed legislation, counties will retain an additional 50 percent, or
$141,069,618 ($282,139,235 x 50%), of total realty transfer tax collections. This funding
would have otherwise been allocated to the General Fund.
• Therefore, the decrease in state revenue to the General Fund and the equivalent increase in
local revenue is estimated to be $141,069,618 in FY25-26 and subsequent years.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director