AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 5, relative to property taxes.
Summary
HB2325 would cap local property tax rates in Tennessee by setting a maximum county property tax rate of $3.00 per $100 of assessed value and a maximum municipal property tax rate of $2.50 per $100 of assessed value. The bill amends the sections of Tennessee Code Annotated governing county and municipal property taxes and adds a new provision making clear that local governments may not set rates above those limits.
The measure is prospective, taking effect January 1, 2027, and would apply statewide to counties and municipalities that levy property taxes. In practical terms, it would restrict local taxing authority and could limit future property tax increases above the statutory caps, while leaving existing tax administration rules in place except where they conflict with the new ceilings.
Impact
The bill would amend Title 67, Chapter 5 of the Tennessee Code by revising the statutory authority for county and municipal property tax rates and by adding an express prohibition against exceeding the new caps. It would directly affect county legislative bodies and municipal governments by limiting the maximum rate they may adopt for property taxes, and it would likely constrain local revenue-raising flexibility beginning in 2027.
Sentiment
Available voting history suggests the bill drew some support but also some resistance, as reflected in the 5-2 vote to defer in the House Cities & Counties Subcommittee. Because there are no committee transcripts, the broader discussion is not available, but the vote indicates the proposal was considered and had at least a modest level of backing without clear consensus.
Contention
The main point of contention is likely the balance between taxpayer relief and local government fiscal autonomy. Supporters would generally favor the bill as a limit on property tax burdens, while opponents—typically county and municipal officials or those concerned about local budgets—may object that the caps could reduce flexibility to fund schools, public safety, infrastructure, and other local services. The subcommittee deferral vote suggests these concerns were significant enough to prevent immediate advancement.