(a) A local government is authorized to levy a surcharge, for use in accordance with § 67-4-3205, on the same privileges subject to the taxes listed in subdivisions (a)(1)-(6), if the underlying local tax on such privileges is being collected at the time a transit improvement program is adopted in accordance with § 67-4-3206. Any surcharge shall be a separate charge in addition to the local taxes provided in subdivisions (a)(1)-(6). Notwithstanding, and in addition to, any other law authorizing a local government to impose a local privilege tax, and subject to the maximum rates or amounts provided in subdivision (g)(2), any surcharge levied pursuant to this part shall be limited to the following local privilege taxes:

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Terms Used In Tennessee Code 67-4-3202

  • Department: means the department of revenue. See Tennessee Code 67-4-2004
  • Local government: means :
    (A) Any county in this state, including any county having a metropolitan or consolidated form of government, having a population in excess of one hundred twelve thousand (112,000), according to the 2010 federal census or any subsequent federal census. See Tennessee Code 67-4-3201
  • Month: means a calendar month. See Tennessee Code 1-3-105
  • Sales: means all gross receipts of the taxpayer not allocated under this part. See Tennessee Code 67-4-2004
  • State: means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States and any foreign country or political subdivision thereof. See Tennessee Code 67-4-2004
  • Surcharge: means a tax, or combination of taxes, levied by a local government pursuant to this part. See Tennessee Code 67-4-3201
  • Transit improvement program: means a program consisting of specified public transit system projects and services. See Tennessee Code 67-4-3201
(1) Local option sales and use tax, pursuant to chapter 6, part 7 of this title;
(2) Business tax, pursuant to the Business Tax Act, compiled in part 7 of this chapter;
(3) Motor vehicle tax, pursuant to title 5, chapter 8, part 1 or an applicable private act;
(4) Local rental car tax, pursuant to part 19 of this chapter;
(5) Tourist accommodation tax, pursuant to title 7, chapter 4, or hotel occupancy tax pursuant to part 14 of this chapter or an applicable private act; and
(6) Residential development tax, pursuant to the County Powers Relief Act, compiled in part 29 of this chapter.
(b) No surcharge under this part shall become effective unless approved by a majority of the number of registered voters of the local government voting in an election on the question of whether the surcharge shall be levied, pursuant to the procedures in this subsection (b). Upon the adoption of a transit improvement program in accordance with § 67-4-3206, and receipt of a certified copy of the adopted ordinance or resolution regarding the program, the county election commission is directed to call an election to be held in accordance with § 2-3-204 to approve or reject the levy of the surcharge. An election to approve or reject the levy of the surcharge may be considered a general election for purposes of § 2-3-204(c), which shall be conducted as follows:

(1) The ballots used in the election shall have printed on them the surcharge and the brief summary of the transit improvement program from the ordinance or resolution adopted pursuant to § 67-4-3206, providing options to vote “FOR” or “AGAINST” the ordinance or resolution levying the surcharge, and the voters shall vote for or against approval of the ordinance or resolution;
(2) The votes cast shall be canvassed and the results proclaimed and certified by the county election commission to the local government’s legislative body;
(3) The qualifications of voters shall be the same as those required for participation in general elections;
(4) All laws applicable to general elections shall apply to the determination of the approval or rejection of the surcharge; and
(5) If the majority of those voting in the election vote for the ordinance or resolution levying the surcharge, the ordinance or resolution shall be deemed to be approved on the date that the county election commission makes its official canvass of the election returns.
(c) No surcharge shall be collected until the first day of a month occurring at least sixty (60) days after the date of approval of the levy of the surcharge; provided, however, that such surcharge shall apply only to tax periods beginning on or after October 1, 2017. The local government shall furnish a certified copy of the adopted ordinance or resolution to the department of revenue within ten (10) days of the approval of the levy of the surcharge.
(d) Any surcharge levied pursuant to this part shall remain in effect until the occurrence of a specific date or condition of termination in the ordinance or resolution adopting the surcharge, or until the surcharge is repealed in the same manner as adopted under this part.
(e) If an election held pursuant to this part results in the rejection of the levy of the surcharge, a subsequent election regarding a surcharge authorized by this part may not be held for at least twelve (12) months from the date of the election.
(f) If a surcharge authorized by this part is ratified by a city that meets the definition of local government in § 67-4-3201 prior to adoption or ratification of a surcharge by the county in which the city or town is located, the effectiveness of the city’s surcharge shall be suspended for a period of forty (40) days beyond the date on which it would otherwise be effective. If during this forty-day period, the county legislative body adopts a resolution in accordance with § 67-4-3206, the effectiveness of the surcharge shall be further suspended until the referendum is held in accordance with this section. If the county surcharge is ratified, the city’s surcharge shall be null and void. A city that meets the definition of local government in § 67-4-3201 shall not adopt a surcharge pursuant to this part if a county has adopted and is collecting a surcharge pursuant to this part.
(g)

(1) The rate of a surcharge for the local taxes provided in subdivisions (a)(1)-(6) shall not exceed the maximum rate or amount established in subdivision (g)(2) for the applicable surcharge. The maximum rate or amount of a surcharge shall be applied to the aggregate of all transit improvement programs adopted by a local government in accordance with § 67-4-3206 and no surcharge may be levied which shall cause the rate or amount of any surcharge to exceed the maximum rate or amount. A local government shall levy any surcharge up to the maximum rate or amount as provided in subdivision (g)(2) without affecting the available taxing authority and rates or amounts of local taxes listed in subdivisions (a)(1)-(6).
(2)

(A) No local government may levy a surcharge on the local option sales and use tax under subdivision (a)(1) that separately exceeds the maximum rate established for the applicable underlying local option sales and use tax.
(B) No local government may levy any combination of tourist accommodation taxes or fees pursuant to title 7, chapter 4, hotel occupancy taxes pursuant to part 14 of this chapter or an applicable private act, local tourism development zone business taxes pursuant to the Local Tourism Development Zone Business Tax Act, compiled in part 30 of this chapter, state sales and use taxes pursuant to chapter 6 of this title, local option sales and use taxes pursuant to chapter 6, part 7 of this title, or surcharges on any combination of tourist accommodation taxes or fees, hotel occupancy taxes, and local option sales and use taxes that under subdivisions (a)(1) and (a)(5) exceed a combined rate of twenty percent (20%) on hotels, motels, or other tourist accommodations subject to such taxes and surcharges.
(C) No local government may levy a surcharge on a business tax under subdivision (a)(2), a surcharge on a local rental car tax under subdivision (a)(4), or a surcharge on a residential development tax under subdivision (a)(6) that separately exceeds the rate of twenty percent (20%) of the current applicable rate of the business tax, local rental car tax, or residential development tax.
(D) No local government may levy a combination of a motor vehicle tax and a surcharge on a motor vehicle tax that under subdivision (a)(3) exceeds a combined amount of two hundred dollars ($200) on persons subject to such taxes and surcharges.
(h) Nothing in this part requires revenue from a surcharge levied pursuant to this part to be expended or distributed for school purposes.
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