AN ACT to amend Tennessee Code Annotated, Title 67, relative to taxes.
Summary
SB 198 authorizes counties and municipalities in Tennessee to satisfy certain large property tax refund obligations by issuing annual credits against a taxpayer’s future property taxes, rather than paying the refund all at once. This option is available only when the refund arises from a written settlement of a property tax dispute filed under specified statutes, the taxpayer agrees in writing, the settlement is filed with the comptroller within 30 days, and the refund is paid off within 10 years. The agreement must also waive any penalties and interest that would otherwise accrue on the refund, and the credits must be applied to the same parcel or parcels involved in the dispute.
The bill applies only to refunds exceeding $500,000 and only to local governments already authorized to accept property tax prepayments and partial payments. It amends Tennessee Code Annotated Title 67, specifically sections governing property tax refunds and penalties/interest on refunds, and creates a temporary exception that is repealed June 30, 2041. The act takes effect immediately upon becoming law.
Impact
The bill changes Tennessee property tax law by creating a new mechanism for local governments to resolve large property tax refund settlements through installment-style tax credits instead of lump-sum cash payments. It also allows taxpayers, as part of those settlements, to waive penalties and interest on the refund, and it bars further accrual of those amounts once the waiver is agreed to. The measure affects counties, municipalities, taxpayers involved in property tax disputes, and the comptroller of the treasury, who must receive the settlement filing.
Sentiment
The available voting history shows strong and unanimous support for the bill. It passed the Senate State & Local Government Committee 8-0, then passed the Senate floor 31-0 on third consideration, and later passed the House 87-0 on regular calendar third consideration. No committee transcript or recorded debate is provided, but the unanimous votes suggest broad agreement that the bill offers a practical settlement tool for local governments and taxpayers.
Contention
No explicit opposition is reflected in the provided materials, and the bill advanced without any recorded dissenting votes. The main policy issue implicit in the text is whether large property tax refunds should be paid immediately or may instead be converted into future tax credits over up to 10 years. The bill also narrows eligibility to very large refunds and to local governments that can accept partial or prepaid taxes, which may limit its use and reduce concern about broader application.