A Tennessee county government acquires a privately owned parcel through a negotiated purchase for $750,000 to use as a public park. The seller's agent asks whether the Tennessee realty transfer tax applies. Which of the following correctly states how the transfer tax applies to this transaction under Tenn. Code Ann. § 67-4-409?
Correct Answer
C) The transfer is exempt from the Tennessee realty transfer tax because the buyer is a government entity
Under Tenn. Code Ann. § 67-4-409, transfers to government entities are exempt from the Tennessee realty transfer tax. Because the buyer in this transaction is a Tennessee county government, the transfer qualifies for the government entity exemption regardless of the purchase price or the fact that consideration is being exchanged. The exemption applies to the transaction itself, not just to one party.
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