Taxes, Sales

Plain English Breakdown

The exact impact on local government budgets and services remains uncertain.

Population Recertification and Sales Tax Allocation

This bill requires annual population recertifications for counties and municipalities in Tennessee to ensure fair distribution of sales tax revenue.

What This Bill Does

• Requires the Department of Economic and Community Development to update and certify the populations of each county and municipality before July 1 every year during the period between federal censuses.
• Directs the Boyd Center for Business and Economic Research at the University of Tennessee to provide annual population estimates to the Department of Economic and Community Development for certification.
• Requires the Department of Revenue and Finance and Administration to use these certified populations when distributing sales tax revenue among municipalities.

Who It Names or Affects

• Counties and municipalities in Tennessee
• The Department of Economic and Community Development
• The Boyd Center for Business and Economic Research at the University of Tennessee

Terms To Know

decennial federal census

A national population count conducted every ten years by the U.S. Census Bureau.

sales tax revenue

Money collected from sales taxes that is distributed to local governments for use in their communities.

Limits and Unknowns

• The bill does not specify how population estimates will be used if a special census or federal census results are available.
• It is unclear what happens if the Boyd Center fails to provide accurate population estimates.

Official Summary Text

POPULATION RECERTIF
ICATION

N
otwithstanding the right or ability of a county or municipality to take a special census at any time during the interim between the regular decennial federal census,
this bill requires
the department of economic and community development
to
revi
se and certify the population of each county and municipality, and the aggregate population of the state, prior to July 1 each year during the interim between the regular decennial federal census according to this
bill
for purposes of ensuring equitable al
location and distribution of moneys
to the several incorporated municipalities within this state
.
The Boyd Center for Business and Economic Research at the University of Tennessee, through the Tennessee state data center,
must
generate annual population e
stimates for each county and municipality and provide the estimates to the department of economic and community development for review and certification. Prior to July 1, the department of economic and community development
must
provide the revised, certi
fied populations of each county and municipality to the department of revenue and the department of finance and administration. The allocation and distribution of moneys pursuant to
state law regarding distribution of sales and use tax
must be made accord
ing to the revised populations certified under this
bill,
except in instances where a jurisdiction's population is revised as a result of a special census or in a year in which populations are revised as a result of the regular decennial federal census.

S
ALES AND USE TAXES ALLOCATION AND DISTRIBUTION

With regard to sales and use taxes, present law requires the commissioner of revenue to deposit
promptly to the credit of the state treasurer in state depositories all moneys received by the commissioner und
er
state law
, and
that
4.6030%
must
be appropriated to the several incorporated municipalities within this state to be allocated and distributed to them monthly by the commissioner of finance and administration, in the proportion as the population of each
municipality bears to the aggregate population of all municipalities within the state, according to the latest federal census and other censuses authorized by law
. This bill adds that such allocations and distributions must also be made in accordance with
this bill.

With regard to sales and use taxes, present law provides for a separate account in the local government fund to be known as the county revenue partnership fund, and further provides that i
n any fiscal year in which revenues are apportioned to

such
fund, the revenue
must
be allocated and distributed to all counties and metropolitan governments in this state monthly by the commissioner of finance and administration, in proportion as the population of each county or metropolitan government bears
to the aggregate population of the state, according to the latest federal census or other censuses authorized by law
. This bill adds that such allocations and distributions must also be made in accordance with this bill.

Current Bill Text

SENATE BILL 427
By Reeves

HOUSE BILL 330
By Stevens

HB0330
001090
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 4,
Chapter 3, Part 7; Section 9-16-101 and Title 67,
Chapter 6, relative to allocations to counties and
municipalities.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-6-103(a)(3)(A), is amended by
adding the language "and according to subdivision (a)(3)(G)" immediately after the language
"according to the latest federal census and other censuses authorized by law".
SECTION 2. Tennessee Code Annotated, Section 67-6-103(a)(3), is amended by
adding the following as a new subdivision (G):
Notwithstanding the right or ability of a county or municipality to take a special
census at any time during the interim between the regular decennial federal census
under this section or another law, the department of economic and community
development shall revise and certify the population of each county and municipality, and
the aggregate population of the state, prior to July 1 each year during the interim
between the regular decennial federal census according to this subdivision (a)(3)(G) for
purposes of ensuring equitable allocation and distribution of moneys under this
subdivision (a)(3). The Boyd Center for Business and Economic Research at the
University of Tennessee, through the Tennessee state data center, shall generate
annual population estimates for each county and municipality and provide the estimates
to the department of economic and community development for review and certification.
Prior to July 1, the department of economic and community development shall provide
the revised, certified populations of each county and municipality to the department of

- 2 - 001090

revenue and the department of finance and administration. The allocation and
distribution of moneys pursuant to this subdivision (a)(3) must be made according to the
revised populations certified under this subdivision (a)(3)(G) except in instances where a
jurisdiction's population is revised as a result of a special census or in a year in which
populations are revised as a result of the regular decennial federal census.
SECTION 3. Tennessee Code Annotated, Section 67-6-103(j)(4), is amended by adding
the language "or according to subdivision (a)(3)(G)" immediately after the language "according
to the latest federal census or other censuses authorized by law".
SECTION 4. This act takes effect January 1, 2026, the public welfare requiring it.