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Subcommittee approves amendment to let certain nonprofit park structures qualify for property tax exemption
Summary
Lawmakers advanced an amendment to HB 2406 that would exempt certain structures owned by nonprofit entities from property taxes within a 400‑acre cap; legal counsel flagged possible constitutional issues but the sponsor narrowed the exemption and the measure passed.
Representative Scarborough described the bill and amendment to allow structures owned by nonprofit entities (including wholly owned subsidiaries) to qualify for real and personal property tax exemptions, while placing a 400‑acre cap on the exemption. Scarborough said the private park in Clinton has generated substantial economic activity and paid "461,000 sales tax revenue" since 2024.
Representative Mitchell warned of potential constitutional conflicts with Article 2, Section 28 of the Tennessee Constitution; the committee went out of session for legal review. Josh Houston of Legal Services initially said he had not found a constitutional problem but later identified language raising constitutional risk because only properties held "purely for" charitable, religious, scientific, literary or educational purposes are exempt. The sponsor narrowed the bill's language and the amendment passed; HB 2406 as amended advances to the next calendar.
Supporters described the park as privately financed and open to the public; opponents and legal counsel asked for clarity to ensure exemptions do not inadvertently allow unrelated commercial uses to escape taxation.
