Taxes, Privilege

Plain English Breakdown

The candidate explanation included details about specific allocations to historical preservation efforts which are not explicitly detailed in the provided summary text.

Changing How Recordation Tax Revenue is Distributed

This bill amends Tennessee Code Annotated to increase the commission retained by county registers from recordation taxes and specifies how this increased revenue should be distributed.

What This Bill Does

• Increases the amount of realty transfer tax and mortgage tax collections that can be retained as a commission by county registers from 2.4% to 5%. This means counties will keep more money for collecting and reporting these taxes.
• Requires that half of this increased commission goes into the county's general fund without being designated for specific projects.
• Specifies that the remaining balance must go to special state funds such as the wetland acquisition fund, local parks land acquisition fund, state lands acquisition fund, agricultural resources conservation fund, and the Tennessee Civil War or War Between the States site preservation fund.

Who It Names or Affects

• County registers who collect and report recordation taxes
• Residents of Tennessee involved in real estate transactions

Terms To Know

Recordation tax

A fee paid when property is bought, sold, or mortgaged to be recorded in public records.

Commission

Money given as a reward for collecting and reporting taxes.

Limits and Unknowns

• The bill does not specify how the money will be used once it is deposited into the county general fund.
• It's unclear what happens if there isn't enough growth in recordation tax collections to meet the allocation requirements.

Official Summary Text

On all transfers of realty,
present law requires a privilege tax be paid to record such transfer
, for state purposes only, of 37¢
per $10
0 on property, with certain exceptions. Also, p
rior to the public recordation of any instru
ment evidencing an indebtedness
,
there
must
be paid a tax, for state purposes only, of 11.5¢
on each

$100 of the indebtedness so evidenced.

The county register and other officials charged with the collection of
such
taxes
must
report all collections to th
e department of revenue
. For
collecting and reporting
recordation
taxes, county registers
are
entitled to retain as commission 5% of the taxes so collected.
However
, 52% of the 5% commission
must
be remitted to the state treasurer and credited to the gen
eral fund of the state.

This bill requires, for the
5
% commission to
be retained by county registers
,
50%
to
be transferred and deposited in the county general fund without being designated for a specific purpose.
Th
e remainder of the taxes collected mu
st be remitted to the state treasurer to be deposited

to
the
special agency accounts
designated by present law
,

subject to
certain
allocation
s

as outlined below
, and to the general fund of the state.

Present law requires such special agency accounts to

b
e allocated certain amounts:
3.25¢
of the tax levied
to
be credited to the wetland acquisition fund, 1.75¢
to the local parks land acquisition fund, 1.5¢
to the state lands acquisition fund, and 1.5¢
to the agricultural resources conservation fund. Howev
er, beginning
with
fiscal year 2015-2016, 50% of the total growth in collections of recordation tax over the previous fiscal year and deposited to the above special funds must be transferred and credited elsewhere:

64% of the growth funds must be transfer
red and credited to the Tennessee Civil War or War Between the States site preservation fund
,
and 36% must be transferred and credited to the historic property land acquisition fund.

Current Bill Text

SENATE BILL 469
By Bowling

HOUSE BILL 586
By Bricken

HB0586
000898
- 1 -

AN ACT to amend Tennessee Code Annotated, Section
67-4-409, relative to recordation tax revenue.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-4-409(d)(2), is amended by
deleting the subdivision and substituting instead:
(2)
(A) Of the taxes collected under this section:
(i) Five percent (5%) must be retained by county registers as
commission for collecting and reporting the taxes levied under this
section; and
(ii) Fifty percent (50%) must be retained by the county register
and transferred and deposited in the county general fund without being
designated for a specific purpose.
(B) The remainder of the taxes collected must be remitted to the state
treasurer to be deposited to the funds enumerated in subsections (g), (i), (j), and
(l), subject to the allocation provided in subsection (m), and to the general fund of
the state.
SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it.