Tenn. Code Ann. § 7-60-211

It is hereby determined that the powers conferred upon counties by this chapter are in all respects for the benefit of the people of the state and for the improvement of their health, safety, welfare, comfort and security, and that the purposes of this chapter are public purposes and that counties are performing an essential governmental function in the exercise of the powers conferred upon them by this chapter. The state covenants with the purchasers and all subsequent holders and transferees of bonds and notes issued by a county pursuant to this chapter, in consideration of the acceptance of and payment for the bonds and notes, that any such bonds and notes of the county and the income from the bonds and notes shall at all times be free from taxation, except for inheritance, transfer and estate taxes. Counties are authorized to include this covenant of the state in any agreement with the holder of such bonds or notes.