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A resolution amending Resolution No. R84-334 to increase the levy and set the rates of the mineral severance tax.
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WHEREAS, pursuant to Tennessee Code Annotated Sections 67-7-201, et seq. (the “Act”), the Metropolitan Council previously adopted Resolution No. R84-334 authorizing the levy of a fifteen cents per ton tax on all sand, gravel, sandstone, chert and limestone severed from the ground located within the jurisdiction of The Metropolitan Government of Nashville and Davidson County (such tax being the “mineral severance tax”); and,
WHEREAS, the Act requires that the revenues of the mineral severance tax be deposited into a county road fund and be designated for expenditures on construction, maintenance, and repair of the county system; and,
WHEREAS, Chapter 285 of the 2025 Tennessee Public Acts (“Public Chapter 285”) amends certain sections of the Act which, among other things, allows a county legislative body to gradually increase the rate of the mineral severance tax from the current maximum rate of fifteen cents per ton to: (i) twenty cents per ton between July 1, 2025, and June 30, 2030, (ii) twenty-five cents per ton between July 1, 2030, and June 30, 2035, and (iii) thirty cents per ton beginning July 1, 2035 and continuing thereafter; and,
WHEREAS, the Act as amended by Public Chapter 285 permits a county legislative body to increase the mineral severance tax by resolution upon approval of a two-thirds (2/3) majority vote; and,
WHEREAS, it being the intent of the Metropolitan Council to levy the maximum rate of the mineral severance tax for each applicable period as provided for by the Act, such being in the best interests and welfare of the citizens of The Metropolitan Government of Nashville and Davidson County.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. That Resolution No. R84-334 is amended so that that subsequent to September 1, 2025, the levy and rate of the mineral severance tax shall be increased to twenty cents ($0.20) per ton, such increased levy and rate not being effective until the first day of the month occurring sixty days after the receipt of a certified copy of this resolution by the State of Tennessee Department of Revenue as referenced in Section 4 of this resolution.
Section 2. That the levy and rate of the mineral severance tax shall increase to twenty-five cents ($0.25) per ton effective on July 1, 2030.
Section 3. That the levy and rate of the mineral severance tax shall increase to thirty cents ($0.30) per ton effective on July 1, 2035.
Section 4. That the mineral severance tax shall be collected in the manner prescribed by, under the conditions imposed by, and with the proceeds used in the manner prescribed by the Act.
Section 5. That pursuant to the Act, upon adoption of this resolution by the Metropolitan Council and upon its signing by the Metropolitan Mayor (or it otherwise becoming effective in accordance with applicable law), the Metropolitan Vice Mayor forthwith shall cause the delivery of a certified copy of this resolution to the State of Tennessee Department of Revenue.
Section 6. That the Metropolitan Department of Finance shall be responsible for, and shall possess all requisite authority to require affected departments to supply information for, the preparation and submittal of the annual written report to the applicable State of Tennessee officials regarding revenues and expenditures of the mineral severance tax as required by the Act.
Section 7. That if any one or more provisions of this resolution shall ever be held by a court of competent jurisdiction to be invalid, the remaining provisions of this resolution shall be unaffected thereby, it being the intention of the Metropolitan Council to adopt the remaining provisions of this resolution notwithstanding any other provision which may be rendered invalid.
Section 8. That any other provision of Resolution No. R84-334 (as now amended) in conflict with this resolution is hereby repealed.
Section 9. That this Resolution shall take effect from and after its adoption, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.
Agenda Analysis
Analysis
This resolution amends Resolution No. R84-334 to increase the levy and set the rates of the mineral severance tax.
Tennessee Code Annotated section 67-1-201, et seq. allow for county legislative bodies to levy a tax for all sand, gravel, sandstone, chert, limestone removed from the ground within its jurisdiction. The Metropolitan Council adopted Resolution No. R84-334, which authorized a levy of fifteen cents per ton tax for these materials removed from the ground in Nashville and Davidson County.
The newly enacted Chapter 285 of the 2025 Tennessee Public Acts (“Public Chapter 285”) allows a county legislative body to gradually increase the rate of the mineral severance tax from the current maximum rate of fifteen cents per ton to: (i) twenty cents per ton between July 1, 2025, and June 30, 2030, (ii) twenty-five cents per ton between July 1, 2030, and June 30, 2035, and (iii) thirty cents per ton beginning July 1, 2035.
The proposed resolution would increase the levy and rate of the mineral sales tax to twenty cents per ton, subsequent to September 1, 2025. This rate would not be effective until the first day of the month occurring sixty days after the Tennessee Department of Revenue receives a certified copy of this resolution. The proposed resolution would also increase the mineral severance tax to twenty-five cents per ton, effective July 1, 2030. The resolution would increase the mineral severance tax to thirty cents per ton, effective July 1, 2035.
Public Chapter 285 requires the resolution to receive a two-thirds majority vote to be adopted.
The mineral severance tax generated $559,006.14 in Fiscal Year 2025 through April 30, 2025. though additional revenue was expected. In Fiscal Year 2024, the mineral severance tax generated $879,139.11 in revenue. The increase will bring an additional $215,000 in FY26 and $250,000 in FY27 through FY30, assuming mineral extraction tons remain level.