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Committee approves local mineral severance tax increase authorized by state law
Summary
Committee members voted 10-0 to adopt a resolution implementing a state-authorized increase in the local mineral severance tax, raising the levy in line with recently passed state legislation; projected FY26 revenue impact was provided by finance staff.
The Budget & Finance Committee on June 30 approved RS 2025-1327, an amendment to increase the local mineral severance tax under recently enacted state law; the motion passed 10-0.
Council member Heltman summarized the action and its fiscal effect, stating that the Tennessee General Assembly passed legislation (House Bill 695 / Senate Bill 889) that allows local governments to increase the mineral severance tax by up to 15¢ over a 10-year period. Heltman said, "Currently, the tax is at 15¢. This would essentially raise it to 20¢." He told the committee the median annual receipts from the tax over the past five years were $789,153, and finance’s estimate for fiscal 2026 is roughly $219,000–$220,000 in additional revenue from the increase.
Heltman noted the figures were provided by Metro Finance and that the additional revenue will phase in over the authorized period. The committee voted to approve the resolution without further discussion.
Why this matters: the change implements state-authorized flexibility to raise a locally collected mineral tax and will modestly increase revenue beginning in FY26; the committee recorded the finance estimates and approved the resolution on a unanimous committee vote.
