Tennessee Property Tax

ASSESSMENT VS. TAXATION - SEPARATION OF DUTIES

Assessment function is distinct from taxation function. Assessor of Property appraises and classifies the property and then applies the statutory percentages to appraisals to determine assessments. County Commission and city governing bodies determine local property tax rates. Taxes are collected by county Trustee and city collecting officials.

THE ASSESSMENT FUNCTION

The Assessor

Appraises real estate for assessment purposes

Tracks changes in ownership, addresses and property boundaries

Is required by state law to verify certain information on real estate sales with buyer or seller

Appraises and assesses business personal property (furniture, fixtures, machinery and equipment)

Responds to requests for public information

Must possess both appraisal and administrative skills to do the job

State Board of Equalization establishes policies and procedures for local Assessors of Property and hears
property appeals beyond the county level.
 

Division of Property Assessments (a division of the Comptroller of the Treasury) monitors the work of
Assessors to ensure proper procedures are followed, provides technical assistance during reappraisal
programs, and provides manuals and educational programs for use by Assessors.

The Assessment Cycle

Property appraisals are established during periodic reappraisal programs using current real estate values on either a 6 year, 5 year or 4 year cycle
 

Between reappraisals, the Assessor's appraisals generally remain constant, with the exception of instances where the property has changed (new buildings , additions, demolitions, etc.)

In addition to assessing new construction annually, the Assessor's office performs a systematic field review of a portion of the county each year so that during a reappraisal cycle all parcels of property are reviewed
 

Changes to the property discovered during review may be added to, or subtracted from the property value between reappraisals, but with the appraised value based on the previous reappraisal program

The Appraisal Process

An appraisal is an estimate of the most probable selling price of a property

Mass appraisal techniques are employed

Physical characteristics listed (dimensions, construction type, age and condition of buildings; size and features of land)

Computer resources used as a tool to assist in the intensive analyses and calculations required

Assessor's experience and appraisal judgment are important
 

The Assessment Process

Property is classified based on its use and statutory assessment percentages are applied to appraised values

Example: A residence appraised at $ 100,000 would have an assessed value of $25,000

Assessment Change Notice required to be sent when the value or classification changes

Appeals

Basis for an appeal: owner’s property value too high, another owner’s value too low, incorrect classification (real vs. tangible personal property, commercial vs. farm or residential property). Tax amounts are not a valid basis for appeal.
 

Steps in an appeal: informal discussion with Assessor, County Board of Equalization (meets beginning June 1),
 

State Board of Equalization (must first appeal to county board), Chancery Court

THE TAXATION FUNCTION

Property tax rate is established by the County Commission and city governing bodies
 

Assessor provides assessed value totals to county and city governing bodies

Total assessment and estimates of other revenue are combined with budget projections to determine the property tax rate.

In a reappraisal year, if the local governing body intends to adopt a tax rate that would generate more revenue than the previous year, a public hearing must be advertised and held

CONCLUSION

Separation of the assessment function from the taxation function protects property owners from possible unfair treatment

The Assessor's job is increasingly demanding in terms of the skills and professionalism required

The level of knowledge and detail required to appraise property for assessment purposes has dramatically increased

Greater detail in appraisals results in a more equitable situation for property owners