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SB 126

Taxes, Real Property - As introduced, requires half the revenue collected from recordation taxes be returned to the county in which the real property is located on a recurring basis; applies to transfers of real property on or after July 1, 2025. - Amends TCA Section 67-4-409.

114th Regular Session (2025-2026) Introduced by Page Walley

SB 126 redirects 50% of Tennessee recordation tax revenue to counties where properties transfer, effective July 1, 2025, shifting recurring state funds to local governments.

Passed on Second Consideration, refer to Senate State & Local Government Committee
#realproperty #taxes
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Bill Summary · SB 126

Legislative bill overview

SB 126 requires Tennessee counties to receive 50% of recordation tax revenue collected within their jurisdiction on an ongoing basis, rather than the current arrangement. The change applies to real property transfers occurring on or after July 1, 2025, and modifies TCA Section 67-4-409.

Why is this important

Recordation taxes generate significant revenue tied to real estate transactions. This bill would substantially redirect funds from the state level to individual counties, affecting local government budgets and potentially altering how counties fund services. The timing coincides with real estate market activity, making the fiscal impact material for both state and county finances.

Potential points of contention

  • State revenue impact: This reduces recurring state-level revenue without identifying offsetting cuts or new revenue sources, potentially creating budget pressures statewide
  • Fiscal disparities: Wealthy counties with high real estate transaction volumes would receive substantially more funding than rural counties, potentially widening service equity gaps
  • Implementation complexity: Counties must establish systems to receive and account for recurring tax distributions; transition from current arrangements may create administrative challenges

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

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