Tenn. Code Ann. § 7-36-121: Tax exemption

So long as the authority owns any of the systems, the property and revenue of such system shall be exempt from all state, county, and municipal taxation. Any bonds issued by the authority pursuant to this chapter, and the income therefrom, shall be exempt from all state, county, and municipal taxation, except inheritance, transfer and estate taxes, and except as otherwise provided by the laws of this state.