Tennessee County Motor Vehicle Privilege Tax Exemption

Most Tennessee counties levy a motor vehicle privilege tax, the wheel tax, collected by the county clerk when a vehicle is registered. Section 5-8-102 exempts two groups of veterans from it. The first is a disabled veteran who has one hundred percent permanent total disability from a service-connected cause, or any former prisoner of war, as determined by VA. This is a status exemption: it attaches to the person and does not depend on how the vehicle was acquired. The second does not ask for a rating at all. A veteran or active-duty service member is exempt for a motor vehicle sold, given or donated to them where they have a service-connected disability as described in 38 U.S.C. 3901 and received a qualifying federal grant toward the vehicle. Section 3901 is the automobile and adaptive equipment provision, and the disabilities it names are loss or permanent loss of use of a foot or hand, permanent impairment of vision of both eyes to a prescribed degree, and certain severe burn injuries and ankylosis. A veteran who holds a 3901 finding qualifies whatever the combined percentage is. This is the provision the Army's benefits library cites as "Tennessee Code 5-8-102" while describing property tax relief. The citation is real and the exemption is real, but it is the wheel tax rather than the property tax, and 67-5-704 is the property tax section. The library's sales tax paragraph describes a real exemption: since March 5, 2018 (Public Chapter 541) a disabled veteran or service member with a VA automobile grant pays no sales tax on the price above the grant and no State registration fee, as well as no wheel tax (Department of Revenue Notice 18-15; see the motor vehicle sales tax entry). The general sales tax exemption in 67-6-303 runs only to service members stationed in the state. What the exemption is worth depends entirely on the county. The wheel tax is a local levy, rates differ widely across the ninety-five counties, and a county that levies none has nothing to exempt. Claim it at the county clerk's office rather than the trustee's.