Taxes, Ad Valorem

Plain English Breakdown

The official source material did not provide specific details about the exact impact of the bill or how tax relief will be provided.

Tennessee Property Tax Relief Act

This bill changes how leftover money from property tax sales is used to provide tax relief for certain homeowners.

What This Bill Does

• Adds a new rule that requires 10% of extra money left after selling delinquent properties to be given as tax relief to specific homeowners.
• Changes the order in which leftover money from property tax sales is distributed, moving elderly low-income and disabled homeowner relief up one place in the list.

Who It Names or Affects

• Homeowners who are elderly, have a low income, or are disabled veterans or widows of disabled veterans.
• Courts and county trustees involved in property tax sales.

Terms To Know

Delinquent taxes

Taxes that are not paid on time.

Tax lien

A legal claim placed on a property because the owner did not pay their taxes.

Limits and Unknowns

• The exact impact of this bill on local government revenue and expenditures cannot be determined due to multiple unknown variables.
• This bill does not specify how the tax relief will be provided or what qualifies as 'elderly low-income'.

Official Summary Text

After
property
taxes become delinquent,
present law requires
the county trustee
to
collect the taxes
from the property owner. If a lien is properly placed on the property through the judicial system, t
he court
must
order a sale o
f the land for cash, certified funds, cashier's check, money order, or automated clearing house transfer, as applicable.

The tax sale proceeds must be distributed
in the
following
order
:

(
1
) Amounts owing the delinquent tax attorneys prosecuting the ca
use
.

(
2
) The costs of the proceeding exceeding the attorneys' fees
.

(
3
) Amounts owing the taxing entities which are parties in the cause
.

(
4
) Amounts owing to tax entities filing a claim for current and other delinquent taxes and interest due them
as stated in claims filed in response to
the
notices sent
to
them and for which no action has been filed, divided prorated upon the amount of the base taxes due each
.

(
5
) Any other property taxes and expenses owing any taxing entity secured by a tax li
en on the parcel
.

(
6
) Any remaining proceeds
to any
interested person
that
file
s
a motion with the court requesting disbursement of any excess sale proceeds
, subject to certain priority order.

This bill adds a new fourth priority distribution and shifts down the current fourth, fifth and sixth priorities above. The new fourth priority is that
10% of any remaining proceeds
must
provid
e
tax relief for homeowners who are elderly low-income, disabl
ed, or a disabled veteran or widow of a disabled veteran
.

Current Bill Text

SENATE BILL 775
By Briggs

HOUSE BILL 765
By Wright

HB0765
002351
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 67,
Chapter 5, relative to delinquent taxes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-5-2501(a)(3)(A), is amended by
adding the following as a new subdivision (vi) and redesignating the existing subdivision (vi):
(vi) Ten percent (10%) of any remaining proceeds to be used to providing tax
relief for the homeowners who are elderly low-income, disabled, or a disabled veteran or
widow of a disabled veteran, pursuant to part 7 of this chapter; then
SECTION 2. This act takes effect July 1, 2025, the public welfare requiring it.