Adequate Facilities Tax for Montgomery County, Tennessee

Over the past few years, Montgomery County has experienced rapid growth in its population, increasing the demand for new or upgraded school facilities. Until recently, the county's revenue-raising authority for such projects was limited and relied heavily upon inter-governmental transfers, which weren't subject to county control, and on property taxes, which would have imposed the costs of new growth on existing residents rather than on new residents, whom are creating the demand for those additional expenditures.

Being committed to the county's present and future residents and desiring to maintain a level of services commensurate with those presently provided, county leadership realized that the present population, employment base, tax base & budget of the county could not have alone generated the additional revenue necessary to provide school facilities adequate to serve new growth without a substantial property tax rate increase.

In order to generate funding to meet the increasing need for school facilities necessitated by new development, county leadership saw the need to impose a fair and reasonable share of the costs of new or upgraded school facilities on that development, as not to create an unfair, inequitable burden on existing county residents. It was decided that the most logical and effective mechanism to accomplish the intended result would be the imposition of a new privilege tax on new development in Montgomery County and to use those revenues from such tax to provide necessary school facilities in those areas of the county that would be required because of growth in that area.

The result is the Montgomery County Adequate Facility Tax (AFT), which was adopted by the Montgomery County Board of Commissioners on April 12, 2004, and became effective on July 1, 2004. The tax imposed is $250 on each new lot (created after the effective date of the AFT Resolution) and $250 on each single-family or multi-family unit(s), increasing 6% annually to a combined maximum of $1000.

Download Adequate Facilities Request Form

AFT Resolution Links

AFT Resolution (in its entirity)

Section 1: Title
Section 2: Definitions
Section 3: Purpose & Intent
Section 4: Taxable Privilege of Develpment
Section 5: Adopted Administrative Guidelines
Section 6: Exemptions
Section 7: Fees
Section 8: Use of Proceeds
Section 9: Place of Collection
Section 10: Authority
Section 11: Appeals Process
Section 12: Individual Status of Resolution
Section 13: Severability
Section 14: Legislative Approval
Section 15: Effective Date of Resolution

AFT Administrative Information Links

AFT Frequently Asked Questions
AFT Collections Information
AFT Appeals Information