Tennessee Senate Bill SB0025

Tennessee 2023-2024 Regular Session

• Introduced: 12/20/22

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, Part 29, relative to the County Powers Relief Act.

Impact

With the implementation of SB0025, local governments could see increased fiscal capacity to fund necessary services and infrastructure as communities expand. The limitation of increasing the tax rate or levying additional taxes for four years after the initial tax or rate increase provides some stability and predictability for property developers and stakeholders. However, this may also limit counties' ability to respond swiftly to changing economic conditions or funding needs that may arise sooner than the four-year review period.

Summary

Senate Bill 25 (SB0025) aims to amend the County Powers Relief Act under Tennessee Code Annotated, specifically addressing the taxation related to residential development. The bill allows counties in Tennessee the authority to levy a tax based on the floor area of residential properties, with a maximum tax rate set at $3.00 per square foot. This change is intended to create a new revenue stream for counties that can be utilized for development-related expenses, potentially easing the financial burden on local governments as they manage growth and infrastructure demands.

Contention

There may be points of contention regarding this bill, particularly concerning the tax burden placed on developers and, subsequently, homeowners. Critics of the bill could argue that implementing a tax based on square footage may discourage residential development, thereby limiting housing availability. Supporters, on the other hand, might contend that this ensures fair taxation based on the scale of development and the necessity for holistic urban planning. The bill's introduction can provoke debates about local versus state control over taxation and development regulations, which could become focal points in public and legislative discussions.