The University of Tennessee, Knoxville

Tennessee County Municipal Advisory Service

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Payment in Lieu of Taxes: Water Utilities

Reference Number: MTAS-1849
Tennessee Code Annotated
Reviewed Date: September 14, 2016
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Revenue Class: Local Taxes

Fund: General     

Account No.: 31512

Description: A payment in lieu of tax that cannot exceed the amount of taxes payable on privately owned property of similar nature. A calculation worksheet may be found at:

Authorization: T.C.A. § 7-34-115 (a)(9)

Requirements or Restrictions: Must be authorized by resolution.

Current Rate: Varies by municipality, based on 1) the equalized tax rate, 2) book value of net fixed assets, and 3) book value of inventory.

Frequency of Payment: Established in the authorizing resolution.

Late Pay Penalty: Not specified.

Exemptions: None.

Collection: Payment is made by water utility to municipality pursuant to authorizing resolution.

Use Restrictions: None.