Tennessee outlines income limits for tax freeze and relief programs

The Cheatham County Workshop held on July 15, 2025, focused on the intricacies of tax relief and tax freeze programs available to residents. The meeting aimed to clarify the differences between these two financial assistance programs, which often lead to confusion among the public.

The discussion began with an overview of the income limits for the tax freeze program, which aligns with state guidelines. The minimum income threshold is set at $37,530, while the maximum reaches $67,460, reflecting the highest median income in Tennessee. Notably, Cheatham County has a local option that allows for a higher income limit of $60,000, which is subject to annual adjustments based on the cost of living.

Participants learned that the tax freeze program, initiated in 2007, is distinct from the older tax relief program established in 1973. The tax freeze is a local initiative available in 27 counties and 35 cities, while tax relief is a state-administered program accessible across all counties. The tax freeze freezes the amount of taxes owed, whereas tax relief provides a reimbursement or credit, ensuring that local governments do not lose tax revenue.

The meeting also highlighted the funding mechanisms for both programs. Tax relief is funded by state dollars, with an annual allocation of approximately $41.2 million, while tax freeze relies on local funding. This distinction is crucial, as tax freeze can lead to foregone revenue for local governments, potentially impacting future tax rates.

Key differences were emphasized: tax relief is available to low-income elderly, disabled individuals, and veterans, while tax freeze is limited to low-income elderly residents. Additionally, tax relief does not affect local tax rates, whereas tax freeze can necessitate adjustments in tax rates to compensate for lost revenue.

The workshop concluded with a discussion on the implications of tax freeze on local budgets, emphasizing the need for careful consideration when planning future tax rates. Participants were encouraged to stay informed about these programs and their potential impacts on the community.