Tennessee residents will get a free ride on the government for a year after the state legislature passed a budget that waives vehicle tag renewal fees.

The $23.75 state portion of license renewals will come free of charge from July 1, 2022 through June 30, 2023. A transportation committee bill related to antique cars got a friendly amendment that pushed the fee waiver to a hearing on the full budget. It will cost an estimated $121 million, which will then be replaced, primarily to the highway fund, out of general fund surpluses.

Next year’s tag renewal will be compliments of the Volunteer State after legislators voted to waive vehicle tag renewals from July 1, 2022 through June 30, 2023. (WJHL Photo)
State Rep. David Hawk (R-Greeneville) said lawmakers looked for feasible ways to return some money to consumers after a fiscal year that isn’t even over yet and has produced a $3 billion surplus over budgeted revenues.

“Because there are so many overcollections, in terms of non-recurring ways we can get dollars back to taxpayers, we felt this was a great way to do that,” Hawk said. “So the state’s portion of your wheel tax is going away starting the next fiscal year in July.”

Hawk isn’t sure whether vehicle owners will simply get a sticker in the mail but said it’s possible for people who have already received one of the new license plates by July.

The fiscal note on the bill estimates five million “class B” vehicles will have their $23.75 fee waived along with 170,000 “class A” (motorcycles) that won’t cost $16.75 to renew.

“A lot of folks will have to make the trip into town to get the new license plate, but you’re not going to have the pain of the money it costs right now,” Hawk said.

Fees will still apply in counties that have separate wheel taxes.