Adequate Facility Tax, Update
| In 2006, the Loudon County Commission passed the
newly state approved Adequate Facility Tax. The tax was controversial
from the start.
Developers and realtors fought the adoption of the tax citing
concerns that the tax would hinder development in the County. The tax
which is $1.00 per square foot on new residential construction is to be
paid only after the developer had sold the house. Estimates were that in
a short time the AFT could possibly generate up to a million dollars per
year. All proceeds generated by the tax are designated to the Loudon
County Board of Education's debt service. The tax took effect January 1,
2007. The first six month report on collections of the AFT are in. According to the fiscal year end revenue report from the Trustee's office, a total of $3,123.00 has been collected under the new tax. This would indicate that only 3123 square feet of residential dwellings has been sold since January 1,2007. While it was expected that it would take some time before the new tax would begin to generate expected revenue, the six month total is far off track from generating any real revenues. With residential development slowing across the county, the new tax may never reach it's predicted revenue projections. |