In an effort to bolster the city’s budget, Knoxville Mayor Indya Kincannon has proposed a new tax measure that, pending a city council decision, could go before voters later this year. Kincannon is asking for a ½ cent increase in the Local Option Sales Tax, which, if approved by the electorate, is projected to funnel an estimated $47 million into projects around the city. These projects include affordable housing initiatives, neighborhood investments, and much-needed maintenance for city parks and properties.
"This is Knoxville’s time. Having the resources to address housing, neighborhood and infrastructure needs will enable us to build the best version of Knoxville to better serve our residents and visitors," Mayor Kincannon said, in a statement released by the City of Knoxville's official website. She emphasized the local infrastructure demands—in excess of $70 million—which are currently unmet. According to the mayor, this tax would relieve some of the financial pressures by generating additional local dollars for local needs. Furthermore, it places a nominal tax burden on individuals beyond the city’s residents, as it includes all who spend within city limits.
Crucially, the proposed tax increase would not apply to groceries—an exemption meant to minimize the impact on Knoxville families. Right now, Tennessee's state sales tax sits at 7%, and since 1989, Knoxville has maintained a Local Option Sales Tax rate of 2.25%. Raising this rate to 2.75% would align Knoxville with neighboring counties that have already hiked their rates to boost local revenues.
Mayor Kincannon is poised to present the initiative in a detailed workshop with the city council, looking ahead to a critical vote this June. Should the proposal pass the council's muster, the tax increase would be placed on the November 2025 citywide ballot for a final verdict by voters. The expressed aim of the increase is to ensure that Knoxville can attend to a backlog of infrastructure and housing needs without kicking the fiscal responsibilities down the road for future generations to shoulder.
