When a deed of trust is presented to the local register of deeds along with an assignment to either the Tennessee Housing Development Agency (“THDA”) or the Federal Housing Administration (“FHA”), the recordation of such deed of trust is exempt from recordation tax.
The assignment to the THDA is exempt in accordance with Tenn. Code Ann. § 13-23-127(a), which states in pertinent part that “nor is the agency required to pay any transfer tax of any kind on account of instruments recorded by it or on its behalf.”
The FHA is a United States government agency. The constitutional doctrine of intergovernmental tax immunity prohibits taxes that discriminate against the federal government or those dealing with the federal government. Therefore, deeds of trusts presented along with an assignment to the FHA are not subject to recordation tax.