School Facilities Tax (SFT)

CHANGES TO THE SCHOOL FACILITIES TAX EFFECTIVE OCTOBER 1, 2024

At it's September 12, 2024 regularly scheduled meeting, the Rutherford County Board of Commissioners adopted a Resolution pursuant to T.C.A. § 67-4-2901, et seq., County Powers Relief Act, regarding certain updates to the School Facilities Tax, to become effective on the first day of the following month. 

Effective October 1, 2024, the following changes will become effective:

• The School Facility Tax rate on residential development will increase from its current one dollar ($1.00) per square foot of floor area to the new rate of one dollar and fifty cents ($1.50) per square foot of floor area.
• In addition to residential development, there will be a School Facilities Tax levied on all new commercial development at a rate of one dollar and fifty cents ($1.50) per square foot of floor area up to 150,000 square feet per structure.
• Previously the law required that the School Facilities Tax liability be payable in two payments – 50% prior to the building permit being obtained and the remaining 50% prior to Certificate of Occupancy issuance.  Effective October 1, 2024, the School Facilities Tax liability must be paid upon completion of the building or structure, but prior to the issuance of the certificate of occupancy.

The tax liability shall still be computed and payable at the Rutherford County Building Codes Department. 

At the time of application for a building permit for development, the estimated tax liability shall be computed based upon the proposed square footage of the facility to be built and the then-current rate of the School Facilities Tax.  The final tax liability shall be computed using the actual square footage of the completed building or structure, but the rate of the tax shall be based upon the rate applicable at the time the permit was issued.  Thus, any building permit issued on or after October 1, 2024 shall be computed at the increased rates. 

Please note – if you are currently holding a tax receipt that has computed an estimated tax liability but a building permit has not yet been obtained for that project, be advised that your building permit must be obtained at the respective Building Codes Department prior to October 1, 2024 for that rate to remain applicable. 

The application shall be submitted to the Rutherford County Building Codes with a copy of the floor plan of the proposed project for review.  Upon verification of the liability the applicant shall sign a form acknowledging the total tax liability which shall be submitted to the applicable county or municipal Building Codes Department with the Building Permit application.

The tax must be paid upon completion of the building or structure, but prior to the issuance of a Certificate of Occupancy (temporary or permanent).  Upon receipt of payment, the applicant shall receive a completed receipt verifying the liability has been fully satisfied so that they may receive a Final Inspection/Certificate of Occupancy.

The Rutherford County Schools Facilities Tax Collection Policy and Schools Facilities Tax Application are linked below for your information.  Should you have any questions regarding this notice, please contact the Rutherford County Building Codes Department at 615-898-7734 or visit our website at buildingcodes.rutherfordcountytn.gov