AN ACT to amend Tennessee Code Annotated, Title 47 and Title 67, relative to veterans.

Tax breaks and payments for veteran housing

Beginning July 1, 2025, Tennessee counties and cities can adopt this property-tax exemption by resolution or ordinance. Eligible property must be owned directly or indirectly by a joint venture with at least one qualifying nonprofit general partner. Joint ventures include limited partnerships and their wholly owned limited liability companies disregarded for Tennessee tax purposes. The property must serve only permanent affordable housing, with all units rented at affordable rates under federal housing income limits. Households must earn no more than 80% of the area's median income. At least 30% of units must be reserved for veterans experiencing homelessness. Eligible veterans are former U.S. service members receiving a veterans' homelessness or homelessness-risk rental subsidy, including VA Supportive Housing vouchers. Veterans also qualify through referrals from a local veterans' housing placement organization using a coordinated entry system. The nonprofit partner must be federally tax-exempt as a charity or social welfare organization and have a homelessness or homeless-veteran housing mission. Its charter must require unpaid directors and officers, permanent nonprofit purposes, and no income or asset distributions to individuals. On dissolution, assets must go to government or similar nonprofits at fair-market value; remaining assets go only to similar nonprofits. Projects with more than 12 units must make payments instead of taxes to cover local improvements, facilities, or services. If no payment amount is agreed upon, payments must equal at least 25% of the tax otherwise due.