AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 6, Part 7, relative to sales and use taxes.
HB0308 amends Tennessee’s sales and use tax law to create a county-specific tax mechanism for counties with populations over 900,000, which currently applies to the state’s largest county. The bill authorizes a county legislative body to levy a local sales tax rate of 3.75%, above the existing 2.25% county rate and, in some cities and towns, above a 2.75% local rate. The additional revenue generated by the increase is dedicated first to the construction of a new county jail or to paying debt service on that project, including principal, interest, and related expenses.
The bill also establishes a time-limited structure for the higher rate. The 3.75% rate would remain in place for up to eight years from the start of collections, or until the jail-related debt is retired, whichever occurs first. After that period, the county rate would revert to 2.75%, and revenue from the increase from 2.25% to 2.75% would then be earmarked for the county sheriff’s department for administrative, operational, and capital expenses, with a prohibition on supplanting existing funding.
If enacted, the bill would amend Title 67, Chapter 6, Part 7 of the Tennessee Code to authorize a special local sales tax structure for counties over 900,000 population. It would override general local tax provisions to dedicate tax proceeds to jail construction and, after reversion, to sheriff’s department funding, thereby creating a targeted revenue stream and altering how local sales tax receipts are distributed and used in the affected county and its cities and towns.
The bill appears to have had limited support in committee but ultimately faced significant opposition. It received a 3-2 recommendation for passage with amendment in the House Cities & Counties Subcommittee, but then failed in the House State & Local Government Committee by a 7-13 vote. The voting pattern suggests some interest in the proposal’s local funding purpose, but not enough consensus to advance it.
The main points of contention likely centered on the use of a local sales tax increase to fund a new county jail and, later, the sheriff’s department, as well as the bill’s county-specific application. Supporters likely viewed the measure as a dedicated funding tool for major public safety and correctional infrastructure needs, while opponents may have objected to raising the sales tax rate, the earmarking of revenue, or the special treatment of a single large county. The committee votes indicate the proposal was more controversial than broadly supported.