Introduction to Tennessee Local Taxes
The three major sources of revenue for Tennessee Cities and Counties are, inorder of importance, 1- Property Taxes, 2-Local Option Sales Taxes and 3-Wheel or Vehicle Taxes.Several other taxes contribute relatively small amounts of revenue. They are 4-Severance Taxes, 5- Hotel-Motel Taxes, 6- Adequate Facilities Taxes and 7-Litigation Taxes.A good, quick-read tutorial is
County Tax Statistics
compiled by the CountyTechnical Advisory Service. The web address for this document is
(this is a shortened version for ease of typing.)If you would like specific information about how much revenue is generated for your city or county by each tax, you may access the latest audit reports from theTennessee Comptroller’s Office here:
1- Property Tax
rates are normally set by a simple majority vote of the countycommission or city council. Tax rate and assessment information for each cityand county can be found here:
.Information about anyindividual property in Tennessee and the owners may be found here:
One County in Tennessee, Nashville-Davidson County,requires a voter referendum to raise property tax rates. Tennessee Tax Revolt isproud to have lead a citizen petition drive to amend the county charter soproperty tax rates in Davidson County may NOT be raised unless the increase isapproved by the voters. We will be glad to explain this petition process tointerested taxpayer groups.
2- Local Option Sales Tax
rates may be changed ONLY after a voter referendum approving the new rate. County Commissions or City Councils maycall for a referendum or Citizens may petition to place a rate change, up or down,on the ballot. The State of Tennessee sales tax rate is 7% for most items. Citiesand counties may add up to 2.75% above the State rate for a combined total rateof 9.75%. A list of local option tax rates for each jurisdiction may be found here:
Very few Tennessee citizens are aware that LocalOption Sales Tax rates may be LOWERED by citizen petition. Tennessee TaxRevolt will be happy to explain the details of this petition procedure to anyinterested taxpayer groups.
3- Wheel Tax
or vehicle taxes
are collected on each vehicle when the licensetags are renewed. Rates can bet set three different ways: 1- The countycommission may call for a referendum election to set a new tax rate. 2- Thecounty commission may set a new rate by a 2/3 vote after which citizens have 30days to petition to place this new rate on the ballot for approval or disapproval or 3- the county commission may ask the Tennessee General Assembly to set anew rate. Wheel tax rates for each county are listed in the last two pages of thistoolkit. A sample wheel tax petition is also included.