Coal Severance Tax

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Authority.  T.C.A. §§ 67-7-101 through 67-7-110.

Description.  The state levies a per ton severance tax on all coal products severed from the ground in Tennessee.  T.C.A. § 67-7-104. The coal severance tax is $1.00 per ton.  "Coal products" means coal ore and any other substance that might be severed from the earth by the process of producing salable coal, by whatever method of severance used.  T.C.A. § 67-7-101.

Distribution.  According to T.C.A. § 67-7-110, the tax is collected by the Tennessee Department of Revenue and is distributed as follows:

  1. 1.125% is retained by the department of revenue and credited to its current service revenue to cover administrative expenses and tax collection expenses.
  2. 98.875% to the county in which the coal products were severed.

a. 50 percent for the educational systems of the county.

b. 50 percent for county highways and stream cleaning systems.