Smith County property owners will not see an increase in the county property tax rate this year following action taken by county commissioners during a special called meeting Monday night, August 10.
Commissioners approved the county’s 2026-27 fiscal year budget along with a state-certified property tax rate of $1.3023.
During the meeting, commissioners also approved a $35 million budget for the Smith County school system.
Budget and Finance Committee Chairman Connor McDonald said the $35 million figure falls between the Smith County Board of Education’s projected revenue of approximately $33 million and its proposed expenditures of about $37 million.
In addition to approving the budget, commissioners agreed to call for a referendum on a proposed increase in the county sales tax rate in areas where the county rate is currently 2 percent.
If approved by voters, the referendum would increase the sales tax rate from 2 percent to 2.75 percent in unincorporated areas of the county and South Carthage. The cities of Carthage and Gordonsville already have a 2.75 percent sales tax rate, meaning the proposed increase would not change the rate within those city limits.
Residents are expected to vote on the proposed increase in November, with the referendum taking place in conjunction with the State General Election and city elections in Carthage and Gordonsville.
McDonald emphasized that the proposed increase would apply only to South Carthage and areas outside the incorporated city limits.
“South Carthage, which has a two percent sales tax rate, would be affected by the rate change,” McDonald explained. “Carthage and Gordonsville are already at the 2.75 percent rate, so nothing changes there, meaning no change to grocery bills at SavWay or Walmart inside those city limits.”
According to McDonald, figures provided by the state indicate that the proposed change would not negatively affect sales tax revenue received by the cities of Carthage or Gordonsville.
County Attorney Jeremy Hassler also addressed the issue during Monday night’s meeting. McDonald noted that sales tax revenue is the only source of county tax revenue collected from non-residents who make purchases in the county.
The idea of pursuing the sales tax increase was initially raised by a member of the Smith County Board of Education during the school board’s previous meeting. County commissioners and school officials subsequently worked together on the proposal.
If voters approve the increase in November,,at least half of the additional sales tax revenue would be directed to the school system. McDonald estimates that amount could generate approximately $450,000 to $500,000 for local schools.
