SB2610 • 2026

Taxes, Privilege

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, Part 29, relative to privilege tax on property development.

Education Taxes

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: Crowe, Alexander
Last action: 2026-04-08
Official status: Assigned to General Subcommittee of Senate Finance, Ways & Means Committee
Effective date: Not listed

Plain English Breakdown

The bill summary does not provide specific details on enforcement mechanisms or penalties for non-payment by developers.

Tennessee Property Development Tax Act

This bill allows certain cities without school systems to charge developers for building new properties and sets rules on how this money can be used.

What This Bill Does

Allows cities that do not have their own schools to create a tax on property development within city limits, following existing laws about county taxes on property development.
Specifies that collected taxes must go into a fund for improving roads, streets, sidewalks, trails, and other transportation infrastructure in the city.
Permits cities to make rules to help manage and enforce this new tax.

Who It Names or Affects

Cities without school systems or districts
Developers building properties within these cities

Terms To Know

Municipality: An incorporated city or town that does not have a school system or educational agency within its area.
Privilege tax: A tax charged for the right to engage in certain activities, like property development.

Limits and Unknowns

The bill only applies to cities without their own school systems.
It does not specify how much money can be collected or what happens if developers do not pay the tax.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

HA0880

Amendment 1-0 to HB2323

Plain English: The amendment changes the definition of 'municipality' to include specific criteria such as not having a school system, being the county seat, having a historic district listed on the national register, and being established by an act of another state's general assembly.

Changes the definition of 'municipality' to require that it does not have a school system or local education agency within its jurisdiction.
Adds criteria for a municipality to be the county seat.
Includes having the first historic district in Tennessee listed on the national register of historic places as part of the definition.
Specifies that the municipality must have been established by an act of the general assembly of a bordering state.

The amendment text does not provide context about why these specific criteria are being added or how they will affect existing municipalities.

Bill History

2026-04-08 Tennessee General Assembly
Assigned to General Subcommittee of Senate Finance, Ways & Means Committee
2026-04-07 Tennessee General Assembly
Failed in Finance, Ways, and Means Committee
2026-04-02 Tennessee General Assembly
Sponsor(s) Added.
2026-04-01 Tennessee General Assembly
Placed on cal. Finance, Ways, and Means Committee for 4/7/2026
2026-04-01 Tennessee General Assembly
Rec. for pass by s/c ref. to Finance, Ways, and Means Committee
2026-03-31 Tennessee General Assembly
Reset on Final calendar of Senate Finance, Ways, and Means Committee
2026-03-25 Tennessee General Assembly
Placed on s/c cal Finance, Ways, and Means Subcommittee for 4/1/2026
2026-03-25 Tennessee General Assembly
Assigned to s/c Finance, Ways, and Means Subcommittee
2026-03-25 Tennessee General Assembly
Rec. for pass. if am., ref. to Finance, Ways, and Means Committee
2026-03-24 Tennessee General Assembly
Placed on Senate Finance, Ways, and Means Committee calendar for 3/31/2026
2026-03-19 Tennessee General Assembly
Sponsor(s) Added.
2026-03-18 Tennessee General Assembly
Placed on cal. State & Local Government Committee for 3/24/2026
2026-03-18 Tennessee General Assembly
Action def. in State & Local Government Committee to 3/24/2026
2026-03-17 Tennessee General Assembly
Refer to Senate F,W&M Committee w/ positive recommendation, as amended
2026-03-17 Tennessee General Assembly
Refer to Senate F,W&M Committee w/ negative recommendation, as amended
2026-03-11 Tennessee General Assembly
Placed on cal. State & Local Government Committee for 3/18/2026
2026-03-11 Tennessee General Assembly
Rec for pass if am by s/c ref. to State & Local Government Committee
2026-03-10 Tennessee General Assembly
Placed on Senate FW&M Revenue Subcommittee calendar for 3/17/2026
2026-03-04 Tennessee General Assembly
Placed on s/c cal Cities & Counties Subcommittee for 3/11/2026
2026-03-04 Tennessee General Assembly
Action Def. in s/c Cities & Counties Subcommittee to 3/11/2026
2026-02-25 Tennessee General Assembly
Placed on s/c cal Cities & Counties Subcommittee for 3/4/2026
2026-02-24 Tennessee General Assembly
Refer to Senate F,W&M Revenue Subcommittee
2026-02-05 Tennessee General Assembly
Passed on Second Consideration, refer to Senate Finance, Ways, and Means Committee
2026-02-05 Tennessee General Assembly
Assigned to s/c Cities & Counties Subcommittee
2026-02-05 Tennessee General Assembly
P2C, ref. to State & Local Government Committee
2026-02-04 Tennessee General Assembly
Intro., P1C.
2026-02-02 Tennessee General Assembly
Introduced, Passed on First Consideration
2026-02-02 Tennessee General Assembly
Filed for introduction
2026-02-02 Tennessee General Assembly
Filed for introduction

Official Summary Text

For the exercise of the privilege of development,
present law authorizes
a county
to
levy a tax based on the floor area of
any
new development.

A county initially levying
such
a tax may levy the tax at a rate not to exceed $1.50 per square foot on residential property and $1.50 per square foot on up to 150,000 sq
uare
f
eet
of commercial property.

Whenever a county has levied
such
a tax or increased the rate of the tax, the county
must
not increase the rate of the tax
,
or levy an additional tax
,
on the pri
vilege of development for a period of four years from the effective date of the tax or rate increase.

After four years from the date the county initially levies the tax
,
or from the date of the last increase in the rate of the tax, the county legislative body may increase the rate of the tax by a percentage not to exceed 10%
. However, the
governing body
must
not levy
such
a tax unless it has adopted a capital improvement program
, which
may be amended by the governing body.

AUTHORITY OF MUNICIPALITIES TO LEVY SUCH TAX

This bill authorizes
an incorporated city or a town that does not have a school system or LEA within its jurisdiction
(
a
"
municipality
")
, by ordinance adopted by its governing body,
to
levy a tax on the privilege of engaging in the act of development within the boundaries of the municipality. Any such tax must be levied at the rate and under the terms, conditions, and limitations contained in
present law as described in the prior paragraph.

This bill requires t
he taxes collected pursuant to this
bill

to
be remitted to the municipal official designated in the ordinance to collect such taxes. The taxes must be placed in a fund designated by the governing body
,
and the proceeds must be used exclusively for the purpose
of
funding a capital improvement program for the construction and improvement of roads, streets, sidewalks, trails, and other similar transportation infrastructure within the municipality. The municipality may adopt administrativ
e guidelines, procedures, regulations, and forms
as
necessary to properly implement, administer, and enforce this
bill.

Current Bill Text

Read the full stored bill text

HOUSE BILL 2323
By Alexander

SENATE BILL 2610
By Crowe
SB2610
012710
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 67,
Chapter 4, Part 29, relative to privilege tax on
property development.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-4-2903, is amended by adding
the following as a new, appropriately designated subdivision:
( ) "Municipality" means an incorporated city or a town that does not have a
school system or LEA within its jurisdiction;
SECTION 2. Tennessee Code Annotated, Title 67, Chapter 4, Part 29, is amended by
adding the following as a new section:
Notwithstanding this part to the contrary, a municipality, by ordinance adopted by
its governing body in the manner provided in § 67-4-2904(b), may levy a tax on the
privilege of engaging in the act of development within the boundaries of the municipality.
Any such tax must be levied at the rate and under the terms, conditions, and limitations
contained in §§ 67-4-2908 and 67-4-2909. The taxes collected pursuant to this section
must be remitted to the municipal official designated in the ordinance to collect such
taxes. The taxes must be placed in a fund designated by the governing body and the
proceeds must be used exclusively for the purpose funding a capital improvement
program for the construction and improvement of roads, streets, sidewalks, trails, and
other similar transportation infrastructure within the municipality. The municipality may
adopt administrative guidelines, procedures, regulations, and forms necessary to
properly implement, administer, and enforce this section.
SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it.