UPDATED september 2019
Truth in Taxation Explained
There is often confusion among taxpayers surrounding Tennessee’s “truth in taxation” statutes. The statutes require assessors to certify the “total assessed value” of taxable property, new construction and improvements not on the previous tax roll and deletions from the tax roll within the jurisdiction to the governing body of the jurisdiction. The governing body must then certify a tax rate “which will provide the same ad valorem revenue for that jurisdiction as was levied during the previous year.” In other words, if total assessments go up, the tax rate must come down.
This provision leads many taxpayers to mistakenly believe that overall property taxes cannot increase. Unfortunately for taxpayers, these statutes do not prevent a taxing jurisdiction’s ability to increase both the tax rate and assessments in the same year. The statutory exception that makes this “double-dip” possible provides that any governing body may levy a greater tax rate so long as it (1) advertises its intent to exceed the certified rate in a newspaper for 30 days, and (2) adopts a resolution levying a tax rate in excess of the certified tax rate.
This exception swallows the rule. Taxing jurisdictions may merely give lip service to maintaining the status quo while being free to raise tax rates and assessments in the same year. This is authorized by law despite the potential windfall to the government and hardship on the taxpayers. A taxpayer’s only real protection is to challenge the value of their property if they believe it is overvalued.
Evans Petree PC
American Property Tax Counsel (APTC)