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HB 2406

Taxes, Real Property - As introduced, increases exemption to a maximum of 400 acres for certain nonprofit entities. - Amends TCA Section 67-5-212.

114th Regular Session (2025-2026) Introduced by Rick Scarbrough

Tennessee bill expands property tax exemption for nonprofits to 400 acres maximum, potentially reducing local tax revenue and shifting costs to other property owners.

Taken off notice for cal. in State & Local Government Committee
#realproperty #taxes
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Bill Summary · HB 2406

Legislative bill overview

HB 2406 increases the property tax exemption limit for certain nonprofit entities in Tennessee from an unspecified current threshold to a maximum of 400 acres. The bill amends the existing tax code (TCA Section 67-5-212) that governs real property exemptions for nonprofits.

Why is this important

Property tax exemptions directly reduce revenue available to local governments for schools, roads, and services, while also potentially shifting tax burdens to private property owners. This expansion could significantly impact municipal budgets, particularly in counties with large nonprofit land holdings, while benefiting qualified organizations like hospitals, colleges, and charitable institutions.

Potential points of contention

  • Revenue impact on local governments: Counties and municipalities may lose substantial tax revenue if nonprofits currently operating near or above 400 acres become newly exempt or expand without taxation
  • Equity concerns: Expanding exemptions may shift proportionally higher tax burdens to residential and commercial property owners in the same jurisdictions
  • Definition ambiguity: The bill's reference to "certain nonprofit entities" lacks specificity—unclear which nonprofits qualify, potentially creating unequal treatment or administrative confusion

Compiled from official sources — confirm details with the bill’s official record.

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