Tennessee Senate Bill SB0986

Tennessee 2025-2026 Regular Session

• Introduced: 2/5/25

Caption

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

Summary

SB0986 amends Tennessee’s realty transfer tax law to require the Department of Revenue to return 50% of the recordation taxes collected on transfers of real property back to the county from which the taxes were remitted. The new requirement applies to transfer taxes collected by county registers and sent to the state, and it is calculated based on the total amount remitted by each county. The bill preserves existing exceptions for commissions and fees already retained under current law, and it does not disturb provisions that direct realty transfer tax revenues to specific accounts or funds under other subsections of the statute. The measure takes effect July 1, 2025, and applies only to real property transfers occurring on or after that date.

Impact

This bill would change the distribution of realty transfer tax revenue under Tennessee Code Annotated § 67-4-409 by creating a mandatory 50/50 split between the state and counties for covered recordation taxes on real property transfers, subject to existing statutory exceptions. Counties would receive a direct return of half of the taxes collected through county registers and remitted to the Department of Revenue, which could increase county revenue while reducing the net amount retained by the state for general or designated purposes.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of debate, amendment activity, or partisan division. Based on the bill text alone, the measure appears revenue-sharing oriented and administratively straightforward, suggesting a neutral-to-supportive posture may be likely among county interests, though the fiscal impact on state revenue could prompt scrutiny from state budget stakeholders.

Contention

The main point of contention would likely be the fiscal tradeoff between state and county governments: counties benefit from receiving 50% of the tax revenue, while the state would forgo that portion unless it is already dedicated to specific funds under existing law. Another possible issue is the interaction with the statute’s existing earmarks and exceptions, since the bill explicitly preserves credits to specific accounts or funds, which may limit how much revenue is actually returned to counties in practice.