Can the Tennessee legislature use a narrow population bracket to let one specific county collect a tax that state law forbids?

Plain-English summary

Tennessee law bars a county and a municipality within that county from both levying hotel and motel occupancy taxes on the same lodging. Tenn. Code Ann. § 67-4-1425(a). Whichever local government imposes the tax first gets to keep it; the other is shut out. The 2018 General Assembly considered HB 2341/SB 1652, which would exempt one specific county from that priority rule. The bill drew a narrow population bracket so that the exemption applied only to a county "having a population of not less than 37,701 nor more than 31,807." (The bracket as written is internally garbled, with the floor higher than the ceiling, but the legislative description identifies Obion County as the intended beneficiary.)

Rep. Bill Sanderson asked AG Slatery whether such a bill would survive a constitutional challenge. The opinion says probably not.

The first problem is equal protection plus the special-legislation rule. Article I, § 8 of the Tennessee Constitution guarantees equal protection of the laws, and article XI, § 8 forbids "special legislation" benefiting specific localities arbitrarily. A legislative classification clears these bars if "any state of facts may reasonably be conceived to justify" it. Riggs v. Burson, 941 S.W.2d 44, 53 (Tenn. 1997). But the AG could not identify any rational reason why a county with a population in this specific range should be allowed to collect a duplicate occupancy tax when no other county can. Tennessee courts have repeatedly struck down narrow population brackets used to single out one or a few counties without an explained reason. Knoxville Community Dev. Corp. v. Knox County, 665 S.W.2d 704; Nolichuckey Sand Co. v. Huddleston, 896 S.W.2d 782 (Tenn. Ct. App. 1994); Chattanooga Metro. Airport Auth. v. Thompson, 1997 WL 129366 (Tenn. Ct. App. Mar. 24, 1997).

The opinion notes one decision pointing the other way: Admiralty Suites & Inns, LLC v. Shelby County, 138 S.W.3d 233 (Tenn. Ct. App. 2003). That case (overruled on jurisdictional grounds in Chuck's Package Store v. City of Morristown) upheld an earlier exemption from § 67-4-1425 that singled out Shelby, Williamson, and Rutherford Counties through narrow population brackets. The State defended that exemption with expert evidence supporting a rationale tied to those counties' specific characteristics. If similar evidence could be produced for Obion County, the bill might survive. Without such evidence, however, the AG predicts likely invalidation.

The second problem is private or local legislation. Even if a rational basis could be patched in, article XI, § 9 of the Tennessee Constitution makes legislation that is "private or local in form or effect" and "applicable to a particular county or municipality" void unless it requires local approval. Civil Serv. Merit Bd. v. Burson, 816 S.W.2d 725, 729 (Tenn. 1991). A bill that, in effect, applies only to one county and lacks a local-approval mechanism may fall under § 9. The opinion cites Bd. of Educ. of Shelby County v. Memphis City Bd. of Educ., 911 F. Supp. 2d 631 (W.D. Tenn. 2012), which voided a general law that in practice applied only to Shelby County and lacked local approval. The Obion bill would face the same kind of attack.

Currency note

This opinion was issued in 2018. 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.

Common questions

Q: What is a "narrow population bracket"?
A: It is a drafting trick where a statute's coverage is defined by a population range so tight that only one county fits inside it. The point is to single out a particular county without naming it. Tennessee courts have come to expect a real-world reason tied to the population characteristic; without one, the classification fails.

Q: Doesn't rational basis review almost always uphold legislation?
A: It is deferential, but not toothless. The Court of Appeals in Chattanooga Metro. Airport Auth. v. Thompson held that "even the generous rational basis standard requires that an exclusion based on a population bracket have some relation to a distinctive characteristic of that size population." When the legislative record contains no explanation and no obvious distinctive characteristic, courts have struck the classification.

Q: Why are there two different constitutional doctrines (sections 8 and 9)?
A: Sections 8 of articles I and XI go to whether the classification has a rational basis. Section 9 of article XI is structural: it requires private or local legislation to be approved locally, even if the classification itself is rational. A bill that fits only one county can fail either test independently.

Q: How can the General Assembly do something like the Obion exemption properly?
A: Either provide an explicit, evidence-supported rationale tied to the population range, or include a local-approval mechanism so the bill comes within article XI, § 9's safe harbor. The 1979 Leech v. Wayne County decision and earlier AG opinions referenced here have set out these options.

Q: What happened in the Shelby/Williamson/Rutherford carve-out case?
A: Admiralty Suites upheld it because the State produced expert testimony explaining why three particular counties needed different occupancy tax treatment. The case was later overruled on jurisdictional grounds in Chuck's Package Store, but the substantive reasoning remains a useful comparison.

Background and statutory framework

Tennessee Code § 67-4-1425(a) is part of the broader hotel/motel occupancy tax framework. The statute "gives priority to levy such a tax within a municipality's boundaries to the local government entity (either the county or the municipality) that first imposes such a tax, and prohibits the other local entity from doing so." Tenn. Att'y Gen. Op. 03-134 (Oct. 8, 2003). The rule prevents stacking taxes on the same lodging.

Article I, § 8 and article XI, § 8 of the Tennessee Constitution operate together as the state's equal-protection and anti-special-legislation safeguard. Civil Serv. Merit Bd. v. Burson articulates the rational-basis test, and Riggs v. Burson states the deferential "any state of facts" formulation. The AG has tracked these doctrines in a long line of opinions evaluating narrow-population-bracket bills, several of which the present opinion cites: Tenn. Att'y Gen. Ops. 13-37 (May 2, 2013), 08-80 (Apr. 3, 2008), and 99-104 (May 10, 1999).

Article XI, § 9 adds the structural restriction that local legislation requires local approval. Farris v. Blanton supplies the operative test: a law is local in effect if it is "[not] designed to apply to any other county" in Tennessee. The Bd. of Educ. of Shelby County federal decision provides a recent example of § 9 being used to strike a single-county statute.

Citations

• Tenn. Const. art. I, § 8; art. XI, §§ 8, 9
• Tenn. Code Ann. § 67-4-1425(a)
• H.B. 2341 / S.B. 1652, 110th Tenn. Gen. Assem. (2018)
• Civil Serv. Merit Bd. v. Burson, 816 S.W.2d 725 (Tenn. 1991)
• Riggs v. Burson, 941 S.W.2d 44 (Tenn. 1997)
• Knoxville Cmty. Dev. Corp. v. Knox County, 665 S.W.2d 704 (Tenn. 1984)
• Nolichuckey Sand Co. v. Huddleston, 896 S.W.2d 782 (Tenn. Ct. App. 1994)
• Chattanooga Metro. Airport Auth. v. Thompson, 1997 WL 129366 (Tenn. Ct. App. Mar. 24, 1997)
• Admiralty Suites & Inns, LLC v. Shelby County, 138 S.W.3d 233 (Tenn. Ct. App. 2003)
• Chuck's Package Store v. City of Morristown, 2018 WL 718348 (Tenn. Feb. 6, 2018)
• Farris v. Blanton, 528 S.W.2d 549 (Tenn. 1975)
• Bd. of Educ. of Shelby County v. Memphis City Bd. of Educ., 911 F. Supp. 2d 631 (W.D. Tenn. 2012)
• Leech v. Wayne County, 588 S.W.2d 270 (Tenn. 1979)
• Lawler v. McCanless, 417 S.W.2d 548 (Tenn. 1967)
• Tenn. Att'y Gen. Op. 03-134 (Oct. 8, 2003); 13-37 (May 2, 2013); 08-80 (Apr. 3, 2008); 99-104 (May 10, 1999); 18-10 (Mar. 14, 2018)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2018/op18-18.pdf

Original opinion text

Constitutionality of Legislation Exempting Obion County from Tax Law

Question
Would proposed legislation intended to exempt Obion County from the operation of Tenn. Code Ann. § 67-4-1425 by means of a narrow population bracket raise constitutional concerns?

Opinion
Yes.

ANALYSIS

State law generally prohibits a county and a municipality from both levying occupancy taxes on hotels and motels located in the municipality. Tenn. Code Ann. § 67-4-1425(a). Instead, the statute "gives priority to levy such a tax within a municipality's boundaries to the local government entity (either the county or the municipality) that first imposes such a tax, and prohibits the other local entity from doing so." Tenn. Att'y Gen. Op. 03-134 (Oct. 8, 2003). In other words, "only the entity that first levies an occupancy tax may maintain that tax" under the general terms of the law. Admiralty Suites & Inns, LLC v. Shelby County, 138 S.W.3d 233, 236 (Tenn. Ct. App. 2003), overruled on other grounds by Chuck's Package Store v. City of Morristown, No. E2015-01524-SC-R11-CV, ___ S.W.3d ___, 2018 WL 718348 (Tenn. Feb. 6, 2018).

House Bill 2341/Senate Bill 1652, 110th Tenn. Gen. Assem. (2018), would exempt any county "having a population of not less than thirty-seven thousand seven hundred one (37,701) nor more than thirty-one thousand eight hundred seven (31,807), according to the 2010 federal census or any subsequent federal census" from the operation of Tenn. Code Ann. § 67-4-1425. As the legislative description of the bill indicates, the practical effect of this narrow population bracket would be to exempt only Obion County from the prohibition on double taxation.

The use of a narrow population bracket to exempt only Obion County from the operation of the general prohibition in § 67-4-1425 would raise significant concerns under the Tennessee Constitution. Article I, section 8 and article XI, section 8 prohibit legislation that treats some counties differently than others without a rational basis for the classification. Civil Serv. Merit Bd. v. Burson, 816 S.W.2d 725, 730-31 (Tenn. 1991). As this Office recently explained, article I, section 8 "guarantees equal protection of the laws," and article XI, section 8 "restricts the legislature from enacting 'special legislation' for the benefit of specific individuals or localities in an arbitrary or capricious manner." Tenn. Att'y Gen. Op. 18-10 (Mar. 14, 2018).

Such legislative classifications are presumptively constitutional and will be upheld if "any state of facts may reasonably be conceived to justify" the different treatment. Riggs v. Burson, 941 S.W.2d 44, 53 (Tenn. 1997). Thus, with respect to a narrow population bracket proposed in HB 2341/SB 1652, the test would be "whether a rational basis exists for the narrow population classification that suspends the general law" prohibiting double taxation only as to Obion County. Tenn. Att'y Gen. Op. 13-37 (May 2, 2013).

The proposed legislation, through a narrow population bracket, would have the effect of exempting Obion County from the prohibition against double taxation without providing any rationale. And no rationale unique to a county with a population in that particular range is otherwise apparent. Accordingly, a court would likely conclude that the proposed legislation is unconstitutional because there appears to be no rational basis on which to justify the narrow population-bracket classification. See Knoxville Cmty. Dev. Corp. v. Knox County, 665 S.W.2d 704, 705 (Tenn. 1984) (finding "no reason to justify the discriminatory classification" of a narrow population bracket); Nolichuckey Sand Co. v. Huddleston, 896 S.W.2d 782, 789 (Tenn. Ct. App. 1994) (finding "no underlying rationale" to support "myriad population exclusion brackets" in a tax law). As the Court of Appeals has recognized in analyzing a similar statute that exempted Hamilton County from a generally applicable provision, "even the generous rational basis standard requires that an exclusion based on a population bracket have some relation to a distinctive characteristic of that size population." Chattanooga Metro. Airport Auth. v. Thompson, No. 03A01-9610-CH-00319, 1997 WL 129366, at *3 (Tenn. Ct. App. Mar. 24, 1997) (no perm. app. filed).

[Footnote 1: In the Admiralty Suites decision, which was overruled on jurisdictional grounds, the Court of Appeals upheld the constitutionality of similar legislation, which exempted three particular counties, Shelby, Williamson, and Rutherford, from the double-taxation prohibition in Tenn. Code Ann. § 67-4-1425 based on narrow population brackets. 138 S.W.3d at 240-41. In that case, however, the State defended the exemption by providing evidence from experts supporting a rationale for the differential treatment of those three specific counties. Id. If similar evidence could be presented in favor of the proposed legislation, it could potentially withstand constitutional scrutiny under the reasoning of Admiralty Suites.]

[Footnote 2: This Office has in the past questioned the constitutionality of classifications identifying individual counties through the use of narrow population brackets that lack any express or apparent rationale. See, e.g., Tenn. Att'y Gen. Op. 13-37 (May 2, 2013); Tenn. Att'y Gen. Op. 08-80 (Apr. 3, 2008); Tenn. Att'y Gen. 99-104 (May 10, 1999).]

But even if a court were presented with evidence of a rational basis sufficient to preserve the narrow population bracket against an equal protection/special legislation challenge under article I, section 8 and article XI section 8, the proposed legislation could face a challenge under another section of article XI, namely section 9. Legislation that is "private or local in form or effect [and] applicable to a particular county or municipality" is void under article XI, section 9 unless the legislation requires local approval. Civil Serv. Merit Bd., 816 S.W.2d at 729 (alteration in original) (quoting Tenn. Const. art. XI, § 9); see also Farris v. Blanton, 528 S.W.2d 549, 551-52 (Tenn. 1975) (section 9 applies to "legislation [that] was [not] designed to apply to any other county"); Bd. of Educ. of Shelby County v. Memphis City Bd. of Educ., 911 F. Supp. 2d 631, 652-660 (W.D. Tenn. 2012) (finding a general law void under section 9 because it applied in practice only to Shelby County and did not require local approval). Thus, the proposed bill, which in effect applies only to a single county because of a narrow population bracket and does not require local approval, may be subject to challenge under article XI, section 9. See Leech v. Wayne County, 588 S.W.2d 270, 274 (Tenn. 1979); Lawler v. McCanless, 220 Tenn. 342, 417 S.W.2d 548 (1967); Tenn. Att'y Gen. 08-112 (May 19, 2008); Op. Tenn. Att'y Gen. Op. 97-47 (Apr. 14, 1997); Tenn. Att'y Gen. Op. 95-62 (May 26, 1995).

HERBERT H. SLATERY III
Attorney General and Reporter

ANDRÉE SOPHIA BLUMSTEIN
Solicitor General

JONATHAN DAVID SHAUB
Assistant Solicitor General

Requested by:
The Honorable Bill Sanderson
State Representative
406 Cordell Hull Bldg.
Nashville, Tennessee 37243