Taxes, Sales

Plain English Breakdown

The official source material does not provide information on whether eligible counties or municipalities will have additional time to receive approval beyond the extended deadlines for applying and receiving commissioner approval.

Extending Deadlines for Tax Revenue Allocation in Rural Counties

This bill extends deadlines for counties to apply and receive approval for tax revenue allocation programs aimed at economically distressed rural areas.

What This Bill Does

• Changes the deadline from December 31, 2026, to December 31, 2040, for counties that border three or more distressed rural counties to apply for eligibility to retain sales and use tax revenue.
• Extends the date by which the commissioner of finance and administration must approve a commercial development district from June 30, 2031, to June 30, 2041.

Who It Names or Affects

• Counties that border at least three distressed rural counties and are seeking eligibility to retain sales and use tax revenue.
• The commissioner of finance and administration who is responsible for approving commercial development districts.

Terms To Know

Commercial Development District

A designated area in a county that aims to promote economic growth through the allocation of sales and use tax revenue.

Eligible Counties or Municipalities

Counties or municipalities that meet specific criteria, such as bordering three distressed rural counties, and have applied for tax revenue allocation programs.

Limits and Unknowns

• The bill does not specify the exact amount of additional state and local sales tax revenue that may be allocated.
• The extent and timing of any additional allocations cannot be estimated with certainty.

Official Summary Text

Present law authorizes the creation of commercial development districts in rural, economically distressed counties experiencing persistent high unemployment and traditionally low levels of family income, to apportion and distribute sales and use tax reve
nue to address such issues. Eligible counties must submit a completed application to the commissioner of finance and administration ("commissioner"), and then may receive an allocation of sales and use tax revenues.

Present law provides that the tax
revenue allocation
available for properties located in a county that borders at least three distressed, rural counties in at least three fiscal years since FY 2016-2017, and whose governing body passed a resolution or official action prior to January 1, 2021, are available
for eligible counties or municipalities that have filed an application with the commissioner between January 1, 2021, and December 31, 2026. This bill extends that application deadline to December 31, 2
040.

Present law provides that
tax revenue allocation available pursuant to this
allocation program
applies to eligible counties or municipalities located in such eligible counties, or industrial development corporations established by such eligible counties or municipalities, that
have received the approval of a commercial development district from the commissioner on or before June 30, 2031. This bill extends that deadline to June 30, 2041.

Current Bill Text

HOUSE BILL 2510
By Sexton

SENATE BILL 2453
By Bailey
SB2453
010224
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 67,
Chapter 6, relative to tax revenue.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-6-104(m)(1)(C), is amended by
deleting the language "December 31, 2026" and substituting instead the language "December
31, 2040".
SECTION 2. Tennessee Code Annotated, Section 67-6-104(m)(2), is amended by
deleting the language "June 30, 2031" and substituting instead the language "June 30, 2041".
SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it.