Can the Tennessee General Assembly pass a private act that prevents any of Bradley County's hotel-occupancy tax from being shared with cities inside the county?

Plain-English summary

Representative Kevin Brooks asked the AG's office whether the Tennessee General Assembly could pass a private act locking cities inside Bradley County out of any share of the county's hotel occupancy tax revenue. The answer was straightforward yes.

Two threads support the conclusion. First, Article II, Section 29 of the Tennessee Constitution requires county-level taxes to be used for county purposes. There is no constitutional requirement that a county share its revenue with municipalities within its borders. The county-purpose requirement is permissive, not protective of municipalities; it limits the county to its own legitimate purposes, but it does not force the county to subsidize cities.

Second, the existing private acts authorizing Bradley County's tourist accommodation tax (Chapter 19 of the 1991 Private Acts, as amended by Chapter 66 of the 2004 Private Acts) already designated specific county-only uses for the revenue: the county general fund, tourism support, industrial recruitment, and (in the 2004 version) the Tri-State Exhibition Center. None of those allocations sent any portion to cities. And nothing in the statewide statute that limits dual city/county occupancy taxes (Tenn. Code Ann. § 67-4-1425) required city revenue sharing either.

The conclusion was simple: the General Assembly could pass a new private act formalizing Bradley County's existing practice and explicitly excluding city distributions. That would not conflict with Article II, Section 29, with § 67-4-1425, or with any other Tennessee law.

Currency note

This opinion was issued in 2016. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Tennessee's tourist accommodation tax framework is built on the General Assembly's constitutional power under Article II, Section 29 to "authorize the several counties and incorporated towns in this State, to impose taxes for County and Corporation purposes." That power has been used to authorize specific counties to levy hotel-occupancy taxes by private act and to authorize broader categories of counties to do so under general law.

Bradley County's tax came in two layers:

• 1991 Tenn. Priv. Acts, ch. 19 authorized a 4% privilege tax on hotel occupancy, allocated 25% to the county general fund, 25% to tourism, 25% to industrial recruitment, and 25% to an agri-business center.
• 2004 Tenn. Priv. Acts, ch. 66 amended the 1991 Act to raise the tax to 5%, and reallocated: 20% to the county general fund, 27.5% to tourism, 27.5% to industrial recruitment, and 25% to the Tri-State Exhibition Center.

Neither act sent any portion of the revenue to municipalities within the county.

Tennessee Code Annotated § 67-4-1425 limits dual city/county tax overlap on the same hotel (essentially preventing double-taxation of the same room). Subsection (a) prevents a county and a city from both levying tourist accommodation taxes on the same hotel, but it does not require revenue sharing or impose any other limit on legislative choice about county-only allocation.

Putting these pieces together: the General Assembly may pass a private act limiting Bradley County's hotel tax to county purposes that exclude city distributions, because (a) the Constitution does not require city sharing and (b) the statutory framework does not require it either.

Common questions

Q: At the time of this opinion, did Tennessee law require counties to share hotel tax revenue with cities inside the county?
A: No. Neither the Tennessee Constitution nor Tennessee Code Annotated § 67-4-1425 required revenue sharing. The General Assembly was free to direct revenue exclusively to county uses.

Q: What does "county purpose" mean in this context?
A: It is the constitutional limit on county-level taxation under Article II, Section 29. The county may spend its tax revenue on anything reasonably related to a county-level public benefit, including tourism promotion, industrial recruitment, and county-owned facilities like the Tri-State Exhibition Center.

Q: What is a "private act" in Tennessee?
A: A statute passed by the General Assembly that applies only to a specific county (or a small number of counties), as distinguished from a "public act" that applies statewide. Private acts are how Tennessee handles county-specific tax authorizations and many other local-government matters.

Q: Did Bradley County's existing private acts already exclude city distributions?
A: Yes. The 1991 Act allocated all revenue to county purposes (general fund, tourism, industrial recruitment, agri-business center). The 2004 amendment likewise allocated all revenue to county purposes (general fund, tourism, industrial recruitment, Tri-State Exhibition Center). Neither included a city share.

Q: Could a city in Bradley County levy its own tourist accommodation tax?
A: Section 67-4-1425(a) limits a city and a county from levying the same kind of accommodation tax on the same hotel. The opinion did not address whether a city in Bradley County could levy any city-only tax outside the scope of that limitation.

Citations and references

Constitutional provisions:

• Tenn. Const. art. II, § 29 (Taxes for county and corporation purposes)

Statutes:

• Tenn. Code Ann. § 67-4-1425 (Dual city/county accommodation-tax limits)

Private Acts:

• 1991 Tenn. Priv. Acts, ch. 19 (Bradley County tourist accommodation tax, original)
• 2004 Tenn. Priv. Acts, ch. 66 (Bradley County tax amendment)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2016/op16-004.pdf

Original opinion text

Application of Proceeds from Bradley County's Tourist Accommodation Tax

Question
May the General Assembly provide by private act that no proceeds from Bradley County's tourist accommodation tax may be distributed to or on behalf of any city located in the county?

Opinion
Yes.

ANALYSIS

Article II, section 29, of the Tennessee Constitution states: "The General Assembly shall have power to authorize the several counties and incorporated towns in this State, to impose taxes for County and Corporation purposes respectively." Thus, when the General Assembly authorizes a county to levy a tourist accommodation tax, the tax revenues must be devoted to a county purpose, and nothing in the Tennessee Constitution or otherwise requires that the county allocate a portion of these tax proceeds to municipalities or other governmental entities within the county.

Chapter 19 of the 1991 Private Acts ("the 1991 Act") authorized Bradley County, Tennessee, "to levy a privilege tax upon the privilege of occupancy in any hotel of each transient in the amount of four percent (4%) of the consideration charged by the operator." The proceeds of that tax were to be "retained by the county and allocated as follows":

(1) Twenty-five percent (25%) for the county general fund;
(2) Twenty-five percent (25%) for the support of tourism in the county;
(3) Twenty-five percent (25%) for the support of industrial recruitment in the county; and
(4) Twenty-five percent (25%) for the support of the newly proposed agri-business center. If sufficient state funds are not available for the new agri-business center, this twenty-five percent allocation shall be deposited in the county general fund.

1991 Tenn. Priv. Acts, ch. 19, § 3. The 1991 Act specified that Tenn. Code Ann. § 67-4-1425 would apply for any tax levied under the Act. Section 67-4-1425(a) essentially limits the ability of a county and a city each to levy a tourist accommodation tax on the same hotel. Nothing in § 67-4-1425 prevents the General Assembly from specifying how proceeds of a county's tourist accommodation tax may be distributed, and certainly nothing requires that revenues from such a tax be allocated to municipalities within the county.

Chapter 66 of the 2004 Tennessee Private Acts ("the 2004 Act") amended the 1991 Act to increase Bradley County's tourist accommodation tax from four percent (4%) to five percent (5%) and to direct that the new increased tax "shall be retained by the county and allocated as follows":

(1) Twenty percent (20%) for the county general fund;
(2) Twenty-seven and one half percent (27.5%) for the support of tourism in the county;
(3) Twenty-seven and one half percent (27.5%) for the support of industrial recruitment in the county; and
(4) Twenty-five percent (25%) for the support of Tri-State Exhibition Center.

2004 Tenn. Priv. Acts, ch. 66, § 3. No part of the 2004 Act required that any proceeds of the levied tax be distributed to or on behalf of any particular city within the county. Moreover, no other Tennessee private or public act imposes such a requirement or entitles a city to the proceeds of such a county tax.

In sum, the Tennessee Constitution requires that taxes authorized by the General Assembly and levied by a county be used for county purposes and no constitutional or statutory provision requires that a tourist accommodation tax authorized by the General Assembly and levied by a county be distributed to or on behalf of a municipality within the county. It follows that the General Assembly may enact legislation regarding the application of Bradley County's tourist accommodation tax, so long as the legislation is consistent with Article II, section 29, of the Tennessee Constitution.

HERBERT H. SLATERY III
Attorney General and Reporter

ANDRÉE SOPHIA BLUMSTEIN
Solicitor General

JAMES P. URBAN
Assistant Attorney General

Requested by:
The Honorable Kevin Brooks
State Representative
103 War Memorial Building
Nashville, Tennessee 37243