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Collection of Property Taxes

Reference Number: MTAS-530
Reviewed Date: 11/28/2022

When read together, T.C.A. §§ 67-1-701–702, T.C.A. § 67-5-1801, and T.C.A. § 67-5-2005 permit a municipality to collect its own property taxes (if authorized by its charter) or to turn over such collection to the county trustee. Generally, if the county trustee collects the municipality’s taxes, the tax due date is the first Monday in October, and the delinquency date is the following March 1. The effect of the due and delinquency dates prescribed by the municipal charter or ordinance is outlined in the "Delinquent Property Taxes" section.

By the 10th of each month, the trustee must make settlement and pay the city its share of taxes collected the previous month. T.C.A. § 67-5-1902. The trustee’s office keeps the following commissions on taxes collected:

  • Up to $10,000 – 6 percent;
  • $10,000 to $20,000 – 4 percent;
  • More than $20,000 – 2 percent.

In computing the trustee’s compensation, all state, county, school, and special funds are lumped together, and each of the political subdivisions must pay its respective portion of the above commissions. T.C.A. § 8-11-110. A trustee who collects city taxes must "execute such bonds as may be required…by the law or any ordinance of any city or town for the collection and prompt payment of all taxes due said city or town". T.C.A. § 67-5-1901(b).

A municipality’s governing body may provide by ordinance or resolution for the early payment of property taxes and provide a taxpayer rebate as follows:

  • Two percent within 30 days of the due date, and one percent within 30 to 60 days of the due date.

If the county trustee has the authority established by T.C.A. § 67-1-702 to collect taxes any time after July 10 prior to the first Monday in October, a municipality’s governing body by the same method may provide for the early payment of property taxes and give a taxpayer rebate as follows:

  • Three percent if paid by the end of July;
  • Two percent if paid by the end of August; and
  • One percent if paid by the end of September.

In the latter instance, the trustee may accept such payments at his discretion. T.C.A. § 67-5-1804.

The purchaser of a business is required to withhold an amount to cover any taxes payable on personal property until the seller produces a receipt from the municipal collector that all taxes, interest, and penalties have been paid. The purchaser’s failure to do so makes him or her jointly liable for any such unpaid amounts. T.C.A. § 67-5-513.

Partial Payments
A municipality that collects its own property taxes may, via ordinance, opt to accept partial payments of property taxes. This requires the filing of a plan with the comptroller. T.C.A. § 6-56-109. All trustees in all counties may accept partial payments of property taxes. In Metro Nashville, the minimum payment is no more than 15 percent or $25, whichever is less. T.C.A. § 67-5-1801(e).