TN HB2607

Counties, municipalities, metropolitan governments, and other taxing entities are prohibited from levying ad valorem (property) taxes that generate total receipts more than 2% above the prior fiscal year's collections.

Revenue from newly constructed properties, properties added to tax rolls, and previously exempt properties are excluded from the 2% cap calculation; debt service on general obligation bonds issued before July 1, 2026 is also excluded.

Exceeding the 2% cap requires the governing body to adopt a resolution declaring intent, then hold a referendum during a regular November election where 60% of voters must approve the increase.

Any voter-approved tax increase above the 2% cap is limited to a maximum of 4 successive years, and the referendum notice must specify the purpose, levy amount, and duration.

Effective July 1, 2026, applying to all tax years beginning on or after that date.