KNOXVILLE, Tenn. — The Knox County Commission is evaluating how recent changes in Tennessee state laws could impact local government finances and is exploring options to strengthen the county’s budget, including potential adjustments to tax policies.
One notable development involves a reduction in the fee that counties pay on local sales tax collections. Commissioner Courtney Durrett explained that when Knox County collects sales tax, it must first send the funds to the state, which then returns the revenue to the county after deducting a processing fee. This fee has recently been lowered from 1.125% to 0.75%, allowing counties to retain a greater share of sales tax revenue.
“The reduction in the fee means more funds are available to address important infrastructure needs,” Durrett said. “That includes improvements to county roads, parks, and schools.”
Additionally, the commission is examining the real estate transfer tax, which currently does not benefit Knox County. At present, the state collects this tax on property sales—whether residential or commercial—and none of those funds are returned to the county. Commissioners are considering whether changes could allow Knox County to share in this revenue stream.
As local governments across East Tennessee adapt to new legislative measures from Nashville, Knox County officials aim to identify opportunities to enhance funding for projects that directly affect residents.
