Official Summary Text
O
n all transfers of realty, whether by deed, court deed, decree, partition deed, or other instrument evidencing transfer of any interest in real estate,
present law requires
there
to
be paid for the privilege of having the same recorded a tax, for sta
te purposes only, of 37¢
per $100
. This bill requires the department of revenue to
remit back to each county, respectively, 50% of the recordation taxes on the transfer of realty that are collected within that county.
AUTHORIZED USES
This bill prohibi
ts such
funds received by counties
from
be
ing
used for salaries and benefits but
authorizes the funds to be used for infrastructure, debt service
for capital projects
, m
atching funds for state and federal project
, or o
ther nonrecurring expenses
. In
alloca
ting the funds received, a county
must
dedicate not less tha
n
50% of the funds to transportation infrastructure projects
.
However,
a county must not use the funds from this revenue source to supplant other state or local moneys appropriated or allocated f
or building, maintaining, or improving county roads or bridges. When presenting the annual work program
required under county uniform highway law,
the chief administrative officer of the county highway department
must
also present recommendations to the c
ounty commission for the use of these funds, prior to their appropriation.
SPECIAL ALLOCATIONS
For collecting and reporting
recordation
taxes levied,
present law authorizes
county registers 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 general fund of the state.
Present law further requires certain portions of the recordation tax levied be credited to special agency accounts, including
3.25¢
to
the
we
tland 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
.
However, b
eginning 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%
must
be transferred 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
.
This bill requires the above special allocations to
be deducted from the 50% of the revenue that is retained by the state, and the distribution to county governments must no
t reduce the portion of the funds allocated for those purposes.
NOT A LOCAL REVENUE SOURCE
This bill prohibits, d
ue to the fluctuations in collections from the
recordation
tax
es
levied
,
funds received by the county
from
be
ing
considered a local revenue
source when calculating the five-year average of local funds
spent for road purposes.
Current Bill Text
Read the full stored bill text
SENATE BILL 1080
By Johnson
HOUSE BILL 649
By Marsh
HB0649
002532
- 1 -
AN ACT to amend Tennessee Code Annotated, Section
67-4-409, relative to the recordation tax.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-4-409, is amended by adding the
following new subsection:
(p)
(1) Notwithstanding another law to the contrary, the department shall
remit back to each county, respectively, fifty percent (50%) of the recordation
taxes on the transfer of realty levied under subsection (a) that are collected within
that county. The commissions authorized in subdivision (d)(2) and the
allocations to various funds and purposes directed in subsections (g), (i), (j), (l),
and (m) must be deducted from the fifty percent (50%) of the revenue that is
retained by the state, and the distribution to county governments must not reduce
the portion of the funds allocated for those purposes.
(2) The funds received by counties pursuant to this subsection (p) must
not be used for salaries and benefits, but may be used for:
(A) Infrastructure, including, but not limited to, road and bridges,
schools, and other public facilities;
(B) Debt service for capital projects;
(C) Matching funds for state and federal projects; and
(D) Other nonrecurring expenses.
- 2 - 002532
(3) In allocating the funds received under this subsection (p), a county
shall dedicate not less than fifty percent (50%) of the funds to transportation
infrastructure projects; provided, that a county must not use the funds from this
revenue source to supplant other state or local moneys appropriated or allocated
for building, maintaining, or improving county roads or bridges. When presenting
the annual work program pursuant to § 54-7-111, the chief administrative officer
of the county highway department shall also present recommendations to the
county commission for the use of these funds, prior to their appropriation.
(4) Due to the fluctuations in collections from the tax levied under this
section, funds received by the county under this subsection (p) must not be
considered a local revenue source when calculating the five-year average of
local funds pursuant to § 67-3-901(d).
SECTION 2. This act takes effect July 1, 2025, the public welfare requiring it, and
applies to transfers of real property on or after such date.