An Analysis of Proposed Ordinance to Eliminate the Knox County Wheel Tax. Citations at the end.
The Proposal and Its Stated Rationale
A Knox County Commissioner is pushing to phase out Knox County’s $36 annual wheel tax, with the goal of eliminating it entirely by July 1, 2028. The stated justification is straightforward: the wheel tax is “regressive and unfair” to low-income families. (WBIR, August 2025)
It’s a sympathetic argument on the surface. But when you run the actual numbers, the logic collapses, and the most likely replacement mechanism, a property tax increase, would almost certainly do far more damage to the very people the proposal claims to protect.
A Brief History: Origins and the Public Vote
The Knox County wheel tax has an origin story that the repeal campaign largely glosses over, and understanding it actually strengthens the case against elimination. The wheel tax was enacted in 2003 by then-County Mayor Mike Ragsdale, initially charging residents $6 per registered vehicle. It was then raised by county voters to $36 in 2004, and the rate has not changed since. (Compass Knox, 2019)
That detail matters: Knox County voters themselves voted to raise the wheel tax to $36. This wasn’t something imposed quietly by a commission at midnight. The increase from $6 to $36 went before the public as a referendum, and voters approved it. The tax was originally implemented to pay for several capital projects, including the building of a new downtown library, which was never built, however other capital projects were financed with the original collections. (WATE, August 2025)
So there are actually two threads of irony woven into the proposal. First, the original capital projects the tax was meant to fund, including the downtown library, were never completed, yet the tax was kept and its future collections redirected to ongoing library operations. Second, and more pointed: the voters of Knox County went to the polls and chose the $36 rate. A commission vote to repeal it, which is exactly what this ordinance requires, would unilaterally undo a decision that Knox County citizens made at the ballot box.
Under Tennessee law, a county wheel tax may be levied by a two-thirds vote of the county legislative body at two consecutive meetings, by majority vote with a referendum, or by private act. Crucially, even the two-thirds commission method is subject to a voter referendum if a petition signed by 10% of voters from the last gubernatorial election is filed within 30 days of passage. (UT County Technical Assistance Service, T.C.A. § 5-8-102)
In other words, state law recognizes that wheel tax decisions are the kind of thing voters have standing to weigh in on. Knox County voters already did weigh in, two decades ago, and they said yes. The political optics of a commissioner running for County Mayor in 2026 asking the commission to override that voter decision, without a new referendum, is a question worth asking out loud.
The wheel tax was not without political controversy at its inception either. Commissioner Paul Pinkston drew the ire of Mayor Ragsdale’s administration specifically for his determined opposition to the implementation of the wheel tax, and the political battle over it had lasting effects on local races for years afterward. This was a hard-fought policy decision, not an accidental one, and the public had the final say on its size.
What the Wheel Tax Actually Funds
Before discussing what happens when it goes away, it’s worth being precise about what the wheel tax does.
The wheel tax generates approximately $15.5 million annually, and the vast majority goes directly to public libraries, roughly 81% of library operations, to the tune of about $13.1 million. The remainder flows to the county general fund (approximately $650,000) and engineering and public works. (WBIR, August 2025)
Between June 2024 and July 2025, the wheel tax brought in about $16.5 million, according to county records. The county’s budget for the 2025–26 fiscal year is around $1.1 billion. (WATE, August 2025)
Eliminating this revenue stream doesn’t make that $16.5 million disappear from the budget, it has to come from somewhere. And the most obvious “somewhere” is the general fund, which would most likely need to grow through a property tax rate increase.
The Math That the Commissioner Isn’t Talking About
Knox County’s Current Tax Rates
Taxes for the 2025 fiscal year are levied at a rate of $1.5540 per $100 of assessed value. (Knox County Finance Department) The City of Knoxville’s municipal tax rate is $2.1556 per $100, making city property owners’ combined rate $3.7096 per $100 assessed value. (Criterion Property Tax Consultants)
Under Tennessee law, residential property is assessed at 25% of its appraised market value. So a modest home with an appraised market value of approximately $240,100 carries an assessed value of $60,025. At the current county rate of $1.554 per $100 of assessed value, that household pays $933 in county property taxes per year.
What a Property Tax Increase Would Cost
Now let’s model what happens when the county needs to replace $16.5 million in lost wheel tax revenue through a property tax increase:
Even a modest rate increase, from $1.554 to $1.854 per $100 assessed value, would raise that same homeowner’s bill to $1,112.86, a jump of $179.67 per year. That’s the equivalent of paying nearly five extra wheel taxes annually, on one vehicle, for a family that may own only one car to begin with.
If the rate were raised all the way to Knoxville’s city rate of $2.1556, that same household would pay $1,293.77, a difference of $360.58, or the equivalent of more than ten wheel taxes per year.
It’s unlikely the rate would need to jump quite that dramatically to replace wheel tax revenue. But even smaller increases tell a damning story for the “this helps low-income people” argument. (Note: The above examples apply to properties in the unincorporated county only.)
The Core Contradiction
Here is the fundamental problem: a low-income family in Knox County is far more likely to own a small, modestly-valued home, or rent one, with one or two registered vehicles than they are to own multiple cars. The wheel tax costs them $36 per vehicle, once a year, at registration. That’s it.
A property tax increase hits them every single year, automatically, with no action required, scaled to the value of their home, and it never goes away. There is no opt-out, no exemption for driving less, and no cap based on how many vehicles you actually own.
The only way the wheel tax is more burdensome than a property tax increase for a low-income family is if that family owns many vehicles, which, statistically, they don’t. High vehicle counts correlate with higher incomes, larger households, and larger homes that carry higher property tax bills. The wealthy multi-car household would pay more in wheel taxes, yes, but they would also pay substantially more in property taxes due to their higher assessed home value.
If We Need Money… An Alternative: Increase the Wheel Tax Instead
Rather than eliminating the wheel tax and replacing it with a property tax hike, Knox County could achieve more revenue with less harm to low-income residents by simply raising the wheel tax to a more competitive rate.
Working from the county’s own revenue figures, the wheel tax brought in approximately $16.5 million between June 2024 and July 2025. (WATE, August 2025) At $36 per vehicle, that implies roughly 458,333 registered vehicles in the county. Raising the wheel tax to $52 per vehicle, still well below what many Tennessee counties charge, would generate approximately $23.8 million annually, an increase of roughly $7.3 million over current collections.
That would not only preserve the existing library and public works funding, it would actually add meaningful revenue to the county budget. And who pays more? Primarily households with multiple vehicles, households that, by definition, have more cars to register and, in all likelihood, have higher incomes and more valuable homes. The very people the Commissioner says deserve relief would see no increase at all, or would pay only $16 more per vehicle per year.
For comparison, Knox County’s $36 wheel tax already sits below the charges in many Tennessee counties. Shelby County charges $75, Davidson County charges $55, Rutherford County charges $52.50, and counties like Dickson ($60), Tipton ($61), and Montgomery ($74) all charge significantly more. (TennesseeLicensePlate.org) A Knox County wheel tax of $52 would still be lower than Nashville, lower than Memphis, and lower than several mid-sized Tennessee counties that residents don’t regard as tax-burdened.
The Regional Competition Argument Doesn’t Hold Either
One of the Commissioner’s secondary arguments is that the wheel tax puts Knox County auto dealers at a competitive disadvantage, noting that six of the eight neighboring counties have no wheel tax. (WATE, August 2025)
This is a real consideration, but it cuts both ways. If Knox County eliminates the wheel tax and funds the shortfall through a higher property tax rate, property owners throughout the county pay more. That affects every homeowner, every landlord, and every business that owns property or has personal property (business assets which are taxed separate from property annually) in Knox County, a far broader economic drag than a modest vehicle registration surcharge that only applies when someone buys or renews a vehicle.
The Library Is the Real Victim
It’s also worth being explicit about what a wheel tax repeal would do to Knox County’s library system. The wheel tax funds approximately 81% of library operations, about $13.1 million out of the roughly $16.1 million total library budget. (WBIR, August 2025) Without a clearly designated replacement revenue stream, the library system would face catastrophic cuts.
Libraries are among the most-used public services by low-income residents, the very population this proposal claims to help. The library provides free internet access, job search resources, children’s educational programming, and a climate-controlled public space. Cutting 81% of its operating budget to save someone $36 a year on their car registration is not a trade most Knox County residents would make if the choice were presented that clearly.
Fun with Numbers
Since we’ve already reverse-engineered the approximate number of registered vehicles in Knox County, roughly 458,333 based on the county’s own revenue figures, let’s see what happens when you apply a few different wheel tax rates to that base. For reference, Knox County currently collects about $16.5 million annually at $36 per vehicle.
| Wheel Tax Rate | Est. Annual Revenue | Gain Over Current |
| $36 (current) | $16,500,000 | — |
| $52 | $23,833,316 | +$7,333,316 |
| $60 | $27,499,980 | +$10,999,980 |
| $75 | $34,374,975 | +$17,874,975 |
| $80 | $36,666,640 | +$20,166,640 |
| $100 | $45,833,300 | +$29,333,300 |
At $75 per vehicle, matching Shelby County’s rate and still below what counties like Robertson ($85.25), Dyer ($90.15), Haywood ($90), and Lake ($100) currently charge, Knox County would generate over $34.3 million, more than doubling current wheel tax revenue and adding nearly $18 million to the county’s coffers. (TennesseeLicensePlate.org)
At $100 per vehicle, rivaling the highest wheel tax in the state, the county would bring in an estimated $45.8 million annually, nearly three times what it collects today.
And here’s the part worth sitting with: at every single rate in that table, the revenue generated exceeds what a property tax increase would need to replace. The county isn’t actually facing a revenue crisis, it’s facing a choice about how to raise revenue.
The wheel tax, for all the political hand-wringing, is arguably one of the fairest tools available. It applies broadly across the largest possible base of Knox County residents, every motorist, every year, in a flat and predictable amount. It doesn’t punish you for living in a modest home. It doesn’t compound annually based on rising property values. It doesn’t penalize renters through higher landlord costs passed downstream.
If the honest conversation Knox County needs to have is about generating more revenue to fund growing services and infrastructure, and the county’s $1.1 billion budget and expanding population suggest that conversation is coming regardless, then the wheel tax deserves a seat at that table as a solution, not a target for elimination. Raising it to $60 alone would nearly cover the $10.9 million gap that the county’s finance chief flagged as a concern during the repeal debate. Raising it to $75 would create an entirely new funding cushion.
It starts to look less like a tax relief measure and a lot more like an opportunity to quietly shift the county’s revenue mix, away from a broad, vehicle-based fee and toward a property tax structure that hits modest homeowners the hardest and benefits those with the fewest assets the least.
The Bottom Line
The Commissioner’s wheel tax repeal is built on a premise, that the tax disproportionately harms low-income families, that doesn’t survive basic arithmetic. A property tax increase to replace the lost revenue would cost those same families far more, scaled directly to the modest homes they live in, every year in perpetuity. The wheel tax, by contrast, scales with the number of vehicles a household registers, which correlates positively with wealth.
If the genuine goal is tax relief for lower-income Knox County residents, the evidence points in the opposite direction from elimination: raise the wheel tax modestly to a rate that’s still below most comparable Tennessee counties, preserve library funding, and leave property tax rates, the burden most acutely felt by modest homeowners, where they are.
Sources
WATE News — “Knox County Commissioner Wants to Eliminate the County’s Wheel Tax” (August 2025) https://www.wate.com/news/knox-county-news/knox-county-commissioner-wants-to-eliminate-the-countys-wheel-tax/
WBIR News — “A Knox County Commissioner Is Pushing to Cut Wheel Tax” (August 2025) https://www.wbir.com/article/news/local/knoxville/knox-county-commissioner-pushing-cut-wheel-tax/51-c04af290-554d-49f4-a4ad-b8dd8703de0d
Compass Knox — “A Shifting Burden” (June 2019) https://compassknox.com/2019/06/06/a-shifting-burden/
Knox County Finance Department https://www.knoxcounty.org/finance/general_information.php
Knox County Clerk’s Office https://www.knoxcounty.org/clerk/motorvehicle/tag_renewals.php
Criterion Property Tax Consultants — Knox County Overview https://criterionpropertytax.com/knox-county/
UT County Technical Assistance Service (CTAS) — County Motor Vehicle Privilege Tax (Wheel Tax), T.C.A. § 5-8-102 https://www.ctas.tennessee.edu/eli/county-motor-vehicle-privilege-tax-wheel-tax
TennesseeLicensePlate.org — Vehicle Registration Fee Data https://tennesseelicenseplate.org/vehicle-registration-fees
