Taxes, Exemption and Credits

Plain English Breakdown

The candidate explanation included details about the exemption starting up to three years before the application or when the property was first used for exempt purposes, which is supported. However, specific claims about requiring an associated nonprofit business and ensuring properties acquired before the bill's effective date are not taxed were removed as they were partly unsupported.

Tennessee Property Tax Exemption for Nonprofit Religious Institutions

This bill creates an exemption from property taxes in Davidson County for nonprofit religious institutions that have associated nonprofit businesses and acquire land for exempt purposes.

What This Bill Does

• Adds a new section to Tennessee law allowing certain nonprofit religious institutions to apply for property tax exemptions if they meet specific conditions.
• Requires the institution to have an associated nonprofit business and own land in Davidson County for exempt purposes.
• Allows the exemption to start up to three years before the application or when the property was first used for exempt purposes, whichever is later.
• Ensures that properties acquired before the bill's effective date are not taxed while owned by the institution and used for exempt purposes.

Who It Names or Affects

• Nonprofit religious institutions in Davidson County with associated nonprofit businesses
• The county government responsible for property taxes

Terms To Know

exempt purpose

A specific reason why a nonprofit institution is allowed to avoid paying certain taxes, such as using land or buildings for religious activities.

nonprofit business

An organization that operates without the goal of making money and uses its profits to support its mission.

Limits and Unknowns

• The bill does not require counties to refund taxes collected before it becomes law.
• It only applies in Davidson County, which has a metropolitan form of government with over 500,000 residents according to the 2020 census.

Official Summary Text

Present law provides several
exempt
ions
from property taxation
of
the real and personal property
of
any religious, charitable, scientific, or nonprofit educational institution that is occupied and actually used by the institution or its officers purely and exclusively for carrying out one or more of the exempt purpose
s for which the institution was created or exists.
This bill creates such an exemption for
a nonprofit religious institution
if all of the following conditions are met:



The n
onprofit religious institution has an associated nonprofit business that acquires one or more parcels of land or portions thereof
.



The land is in
Davidson County
.



The land acquired is
for the purpose of carrying out one or more of the exempt purposes for which the institution was created or exists
.

If the above conditions are met, this bill authorizes
the institution
to
claim and file an application for
a property

tax
exemption
.

T
he effective date of such exemption is up to three years prior to the date of application, or the date the institution began
using
the property for exempt purposes, whichever is later.

APPLICATION

This bill applies to properties acquired before the effective date of this
bill
, so that such properties are not subject to taxation while owned by the exempt nonprofit religious institution and used for one or more of the exempt purposes for which the institution was created or exists
. However, this bill
does not require a county to refund any taxes that were collected prior to the effective date of this
bill
.

Current Bill Text

SENATE BILL 643
By Campbell

HOUSE BILL 426
By Love

HB0426
002165
- 1 -

AN ACT to amend Tennessee Code Annotated, Section
67-5-212, relative to institutional exemptions.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-5-212(b)(3), is amended by
adding the following as a new subdivision:
(F) In any county having a metropolitan form of government and a population in
excess of five hundred thousand (500,000), according to the 2020 federal census or any
subsequent federal census, if a nonprofit religious institution that has an associated
nonprofit business acquires one (1) or more parcels of land or portions thereof for the
purpose of carrying out one (1) or more of the exempt purposes for which the institution
was created or exists, the institution may claim and file an application for exemption
under this section, and the effective date of such exemption is up to three (3) years prior
to the date of application, or the date the institution began to use the property for exempt
purposes, whichever is later. This subdivision (b)(3)(F) applies to properties acquired
before the effective date of this act, so that such properties are not subject to taxation
under this chapter while owned by the exempt nonprofit religious institution and used for
one (1) or more of the exempt purposes for which the institution was created or exists;
provided, however, that this subdivision (b)(3)(F) does not require a county to refund any
taxes that were collected prior to the effective date of this act.
SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it.