Tennessee Senate Bill SB0126

Tennessee 2025-2026 Regular Session

• Introduced: 1/14/25

Caption

AN ACT to amend Tennessee Code Annotated, Section 67-4-409, relative to transfers of realty.

Summary

SB0126 amends Tennessee’s realty transfer tax statute to require the Department of Revenue to remit 50% of the recordation taxes collected on transfers of real property back to each county. The remittance applies to taxes collected by county registers and sent to the state, with the amount returned to each county based on the total taxes that county remits. The bill expressly preserves existing exceptions for commissions and fees retained under current law and for revenues that are already dedicated to specific accounts or funds. The measure takes effect July 1, 2025, and applies only to transfers of real property on or after that date. In practical terms, it changes how realty transfer tax revenue is shared between the state and counties, increasing the portion returned to local governments while leaving the underlying tax collection mechanism in place.

Impact

SB0126 would amend Tennessee Code Annotated § 67-4-409 by adding a new revenue-sharing requirement for realty transfer taxes. It would not create a new tax or change the tax base, but it would alter the distribution of existing recordation tax receipts by directing the Department of Revenue to return half of the collected amounts to counties, subject to existing statutory carve-outs for certain fees and dedicated funds. Counties that collect and remit these taxes would receive a larger share of the revenue, while the state would retain the remainder and continue to administer the tax system.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of debate, support, or opposition in the available materials. Based on the bill text alone, the measure appears to be a local-government revenue measure that would likely be viewed favorably by counties because it increases their share of transfer-tax receipts. Any state-level concern would likely center on reduced state retention of those revenues, but that sentiment is not documented in the provided record.

Contention

The main policy issue is the division of realty transfer tax revenue between the state and counties. Counties are the clear beneficiaries because they would receive 50% of the taxes collected and remitted by county registers, while the state would forgo that portion of revenue. Another possible point of contention is the bill’s interaction with existing statutory exceptions for commissions, fees, and dedicated funds, since those carve-outs limit the scope of the new remittance rule. No specific legislators, agencies, or stakeholder groups are identified in the available discussion materials.