Tenn. Comp. R. & Regs. 0600 — Board of Equalization

Chapter 0600-01 Contested Case Procedures

Tenn. Comp. R. & Regs. 0600-01-.01 DEFINITIONS

As used in these rules, unless the context otherwise requires:

(1) “Administrative Judge” means an individual employed or appointed under authority of T.C.A. § 67-5-1505 or otherwise to conduct Contested Cases with or on behalf of the Board.

(2) “Agent” means a person who is authorized to represent taxpayers; assessors of property; and/or an Assessing Authority in a Contested Case before the Board.

(3) “Assessing Authority” means a county assessor of property where the assessment at issue involves property assessed by the office of the county assessor of property and the Office of State Assessed Properties of the Comptroller of the Treasury where the assessment at issue involves centrally assessed public utility property assessed by the Comptroller’s office.

(4) “Board” means the State Board of Equalization created by Title 4, Chapter 3, Part 51.

(5) “Contended Value” means the value represented on a Party’s appeal form filing to the Board, the County Board’s value, or the original assessment value in the case of a direct appeal.

(6) “Contested Case” is defined as in T.C.A. § 4-5-102(3).

(7) “County Board” means a city, county, or metropolitan board of equalization established under T.C.A. §§ 67-1-401, et seq.

(8) “Executive Secretary” means the Executive Secretary of the Board appointed under T.C.A. § 4-3-5104.

(9) “Party” or “Parties” means a Person or Persons permitted to participate in a Contested Case or as defined in section 0600-01-.07 of these rules.

(10) “Person” means any individual, firm, company, association, corporation, or other artificial or governmental entity.

(11) “Petitioner” means the Party who initiates a Contested Case with the Board.

(12) “Real Estate Appraiser” means a person who is subject to the State Licensing and Certified Real Estate Appraisers Law, codified at T.C.A. §§ 62-39-101, et seq.

(13) “Reasonable Cause” as used in T.C.A. § 67-5-1412 means a legally sufficient reason outside the Party’s control.

(14) “Respondent” means all other Parties who are not the Petitioner.

(15) “Valuation Analysis” means an estimate of value for ad valorem tax purposes which is prepared in conjunction with a Contested Case before the Board or Administrative Judge.

History

Authority: T.C.A. §§ 4-5-217, 67-1-305, 67-5-1412, and 67-5-1514.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed July 5, 2017; effective October 3, 2017. Amendments filed May 12, 2020; effective August 10, 2020. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.02 APPLICABILITY

(1) Unless otherwise provided herein, these rules shall govern the conduct of all Contested Cases before the Board or an Administrative Judge.

(2) In the event of any conflict between these rules and the Uniform Rules of Procedure for Hearing Contested Cases Before State Administrative Agencies (Chapter 1360-04-01), the provisions of these rules shall control.

History

Authority: T.C.A. § 67-1-305.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.03 INITIATING A CONTESTED CASE

(1) A Contested Case before the Board may be initiated by:

(a) Completing and filing a Value Appeal Form, including any digital filing form, approved by the Executive Secretary if the case relates to:

An action taken or reviewable by a County Board or Assessing Authority;
A determination by the division of property assessments of tax relief eligibility.

(b) Completing and filing an Exemption Appeal Form, including any digital filing form, approved by the Executive Secretary if the case relates to an initial determination of the Board designee on an application for property tax exemption or an initial determination of revocation of a property tax exemption;

(c) Filing a specific written petition or complaint, if neither (a) nor (b) above is applicable; or (d) Filing data in such computer-readable format as the Executive Secretary may authorize, subject to technical requirements approved by the Executive Secretary.

Unless excused on the basis of demonstrated hardship, an electronic filing must be used by any taxpayer filing appeals on more than three parcels in a given year, or by any Agent or Petitioner filing appeals on more than three parcels in a given year.

(2) Any appeal form or written complaint under paragraph (1) of this rule shall be:

(a) Signed and sworn to by the Party on whose behalf it is prosecuted, or an authorized representative of such Party;

(b) Accompanied by a copy of any pertinent notice of decision received by the Petitioner from the Assessing Authority or County Board; and (c) When submitted by an Assessing Authority or Party who is not the taxpayer, accompanied by contact information for any relevant Party.

(3) The submission of a written request for an appeal form may be considered an appeal to the Board for purposes of an appeal deadline if it reasonably identifies the property and taxpayer, provided any form required by these rules is completed and filed within 30 days of the written request for an appeal form.

(4) Contested Cases commenced by action of the Board will be initiated by notice to affected Parties. In the case of a declaratory proceeding, notice shall be supplemented by publication of notice in the Tennessee Administrative Register, including a citation and summary of any

rule or statute at issue and a statement of any proposed ruling.

History

Authority: T.C.A. §§ 67-1-305, 67-5-1412, and 67-5-1501.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendment filed May 30, 2013; effective August 28, 2013. Amendment filed August 24, 2015; effective November 22, 2015. Amendments filed February 21, 2018; effective May 22, 2018. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.04 FILING

(1) In a Contested Case where the appeal has not been assigned to the Administrative Procedures Division of the Secretary of State’s Office, an appeal form, complaint, or other document constituting part of the record is deemed to be filed as follows:

(a) If transmitted through the United States mail, the document constituting part of the record is deemed to be filed as of the postmark date.

(b) If transmitted through electronic mail, facsimile (“fax”), or other method, the document constituting part of the record is deemed to be filed as of the date it is received by the Board.

(2) In a Contested Case where the appeal has been assigned to the Administrative Procedures Division of the Secretary of State’s Office, an appeal form, complaint, or other document constituting part of the record in a Contested Case before the Board must be filed in the manner specified by the Administrative Procedures Division.

History

Authority: T.C.A. § 67-1-305.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed February 21, 2018; effective May 22, 2018. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.05 SERVICE OF NOTICE OF HEARING

(1) A notice of hearing or notice of pre-hearing conference before an Administrative Judge shall, within a reasonable time before the hearing or pre-hearing conference, be served on the Parties as follows:

(a) A copy of the notice of hearing or notice of pre-hearing conference shall be sent to all Parties, other than the Assessing Authority or division of property assessments, by certified mail to the mailing address provided on a Value Appeal Form, Exemption Appeal Form, or as otherwise provided by a Party. In addition to certified mail, a copy may be sent to all Parties using electronic means.

(b) A copy of the notice of hearing or notice of pre-hearing conference shall be mailed, by first-class mail or hand delivery, to the office of the Assessing Authority. In addition to first-class mail or hand delivery, a copy may be sent to the office of the Assessing

Authority using electronic means.

(c) Where the appeal concerns the determination by the division of property assessments of tax relief eligibility, a copy of the notice of hearing or notice of pre-hearing conference shall be sent to the division of property assessments by hand delivery or through electronic means.

History

Authority: T.C.A. §§ 4-5-217, 67-1-305, and 67-5-1514.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed July 5, 2017; effective October 3, 2017. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.06 CONDUCT OF HEARINGS

(1) The Board or Administrative Judge shall not require an Assessing Authority, Agent, or Party to be compliant with the Uniform Standards of Professional Appraisal Practice (“USPAP”) or the State Licensing and Certified Real Estate Appraisers Law when the Assessing Authority, Agent, or Party prepares a Valuation Analysis.

(2) Any individual appearing as a Real Estate Appraiser before the Board or Administrative Judge shall comply with all provisions of the State Licensing and Certified Real Estate Appraisers Law. An Assessing Authority or Agent is not required to be a licensed appraiser to testify as to valuation before the Board or Administrative Judge.

History

Authority: T.C.A. §§ 4-5-217, 67-1-305, and 67-5-1514.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.07 PARTIES

(1) The Parties in an appeal to the Board concerning the classification and/or valuation of property shall be:

(a) The Petitioner;

(b) The taxpayer with respect to the property at issue (if not the Petitioner);

(c) The Assessing Authority responsible for the assessment at issue (if not the Petitioner); and (d) Any other Person admitted as a Party.

(2) The Parties in an appeal involving a property tax exemption shall be:

(a) The Person claiming exemption;

(b) The Assessing Authority for the property in question;

(c) Any complainant in an appeal of a property tax exemption revocation proceeding; and (d) Any other Person admitted as a Party.

History

Authority: T.C.A. § 67-1-305.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed July 5, 2017; effective October 3, 2017. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.08 REPRESENTATION BY AGENT

(1) Entry of an appearance in a Contested Case by an Agent shall be made by:

(a) The filing of an appeal form or written complaint;

(b) The filing of a notice of appearance; or (c) Appearance as Agent at a hearing or pre-hearing conference.

(2) An Agent may not enter an appearance under paragraph (1) of this rule or otherwise act on behalf of a Party in a Contested Case without valid written authorization. Such authorization must:

(a) Identify the Party being represented;

(b) Reasonably identify the property by street address, assessor’s identification number, or otherwise;

(d) Indicate the signatory’s title (if the Party represented is a corporation or other artificial entity); and (e) Specify the tax year to which the authorization applies.

(3) When a Party is represented by an Agent, only the Agent is entitled to question witnesses and present argument at any stage of the case.

(4) Once having entered an appearance in a Contested Case, an Agent who wishes to withdraw from representation of a Party shall notify the Board or Administrative Judge and all Parties in writing. The withdrawing Agent must provide the current contact information for the formerly represented Party.

(5) All witnesses who testify shall disclose their employment or other financial relationship with any Party. All witnesses receiving any compensation from a Party shall be subject to examination or cross-examination regarding such employment and the issue of possible bias, which may be addressed in a specific finding by the Board or Administrative Judge.

History

Authority: T.C.A. §§ 4-5-217, 67-1-305, and 67-5-1514.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.09 CONDITIONS FOR APPEAL AND HEARING

(1) No Contested Case will be assigned to the Administrative Procedures Division of the Secretary of State’s Office or docketed for a hearing or pre-hearing conference before an Administrative Judge unless the appropriate appeal form appears to have been fully completed in good faith. If the valuation of the subject property is at issue, the appeal form must include, without limitation:

(a) A bona fide estimate of the market value of the property as of the relevant assessment date; and (b) A brief statement of the basis for that opinion.

(2) For the purpose of determining whether the Board has jurisdiction, a Party will not be deemed to have appealed the property in question to the County Board if:

(a) The Party appealing the County Board’s decision did not timely appeal the disputed classification and/or value to the County Board;

(b) The Party appealing the County Board’s decision failed to make a personal or (if permitted) written appearance before the County Board; or (c) The County Board, without additional consideration, affirmed the disputed classification and/or value at the request of the Party appealing the County Board’s decision.

This subsection shall not be construed in derogation of any right of appeal to, or hearing before, the Board under the provisions of state law.

(3) After the delinquency date for payment of any tax levied on real or personal property, and on written motion of the Assessing Authority, city, or county to whom property taxes are owed, an Administrative Judge hearing an appeal on behalf of the Board shall dismiss the appeal of any Petitioner who:

(a) Fails to pay delinquent taxes that have accrued on the property that is the subject of the appeal; or (b) Fails to pay the undisputed portion of taxes related to the property that is the subject of the appeal. The “undisputed portion of taxes” is the amount that would be imposed on the basis of the classification and market value (equalized by the prevailing appraisal ratio in the county) claimed by the Petitioner on the Petitioner’s appeal form.

History

Authority: T.C.A. § 67-1-305.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.10 ASSIGNMENT OF CASES

Except as the Board may otherwise direct, a Contested Case shall be heard initially by an Administrative Judge assigned by the Administrative Procedures Division of the Secretary of State’s office who shall render an initial order on behalf of the Board in accordance with T.C.A. § 4-5-314(b).

History

Authority: T.C.A. § 67-1-305.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendment filed May 30, 2013; effective August 28, 2013. Amendments filed February 21, 2018; effective May 22, 2018. Amendments filed May 12, 2020; effective August 10, 2020. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.11 COUNTERCLAIMS AND CHANGE OF CONTENDED VALUE

(1) A Party intending to change a Contended Value shall file a written notice of the value being sought by the Party no later than thirty (30) days before a scheduled hearing. It is acceptable to file and send a notice under this rule by email. Within the discretion of the Administrative Judge, failure to file a written notice of a change to a Contended Value as required in this rule may limit the relief a Party may request to upholding the County Board’s value, reverting to the original assessment in the event of a direct appeal to the Board, or adopting the Contended Value included on the initial appeal filing.

(2) A Contested Case may be dismissed through withdrawal filed by the Petitioner unless the Respondent files a written counterclaim in accordance with section 0600-01-.04 of these rules no later than thirty (30) days before the date of a scheduled hearing. It is acceptable to file and send a notice under this rule by email.

(3) Nothing in these rules shall preclude any Party from introducing relevant evidence of a higher or lower value for the property in question than that determined by the County Board, or the assessor in the case of a direct appeal.

History

Authority: T.C.A. §§ 67-1-305, 67-5-1412, and 67-5-1501(d).
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendment filed February 1, 2011; to have been effective May 2, 2011. On April 29, 2011, the Government Operations Committee stayed the rule for 15 days; new effective date May 17, 2011. Amendments filed February 21, 2018; effective May 22, 2018. Amendments filed May 12, 2020; effective August 10, 2020. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.12 SUBSEQUENT TAX YEARS

(1) A real property appeal filed with the Board may be amended to include an assessment year or years subsequent to the year for which the appeal was filed, until the next reappraisal if the real property appeal has not been heard by an Administrative Judge. There is a presumption of Reasonable Cause for filing a direct appeal when a real property appeal has not been heard by an Administrative Judge by the time a Party is due to file an appeal for any subsequent assessment year. An appeal is heard by an Administrative Judge when there has been a hearing concerning the merits of the appeal.

(2) Amendments to include subsequent assessment year or years to an appeal shall be filed in accordance with section 0600-01-.04 of these rules or through initiating a Contested Case in accordance with section 0600-01-.03 of these rules. Failure to address all relevant tax years included in a Contested Case may result in the waiver of any amendments filed in accordance with section 0600-01-.04 of these rules.

(3) The Board and an Administrative Judge shall accept an amendment to include a subsequent year no earlier than May 20 of the tax year to be included and no later than March 1 of the year subsequent to the tax year to be included. Failure to file an amendment timely may result in the assessment for any subsequent year being finalized and deemed conclusive in accordance with T.C.A. § 67-5-1412.

(4) The Administrative Judge may carry forward the original tax year adjudication of value into subsequent tax years within the same reappraisal cycle, but only if there has been no material change to the property, market conditions, or other circumstances or factors substantially impacting value.

History

Authority: T.C.A. §§ 67-1-305, 67-5-1412, and 67-5-1501(d).
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed February 21, 2018; effective May 22, 2018. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.13 HEARINGS BEFORE ADMINISTRATIVE JUDGE

(1) In the hearing of an appeal before an Administrative Judge concerning the classification and/or assessment of a property, the Party seeking to change the current classification and/or assessment shall have the burden of proof.

(2) In the hearing of an appeal from an initial determination on an application for property tax exemption or an initial determination for revocation of an exemption:

(a) The Party seeking to change the initial determination shall have the burden of proof to show, by a preponderance of the evidence, the property qualifies for an exemption.

(b) Upon request of a Party or the Executive Secretary, or by order of the Administrative Judge, the Board designee who made the initial determination under appeal will attend the hearing. The designee may testify and, at the discretion of the Administrative Judge, examine witnesses or otherwise participate in the hearing. The designee may be permitted to participate by telephone or other electronic means when hearings are conducted at locations other than Nashville.

(3) A record of the hearing of any appeal before an Administrative Judge will be made by digital recording. Any Party may, at its own expense, procure a court reporter to record the oral proceedings or a written transcript of the digital recording.

(4) Parties are encouraged where practicable to achieve any necessary discovery informally, in order to avoid undue expense and delay in the resolution of the matter at hand. When such attempts have failed, or where the complexity of the case is such that informal discovery is not practicable, discovery shall be sought and effectuated in accordance with the Tennessee Rules of Civil Procedure.

History

Authority: T.C.A. §§ 4-5-311(c) and 67-1-305.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed February 21, 2018; effective May 22, 2018. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.14 APPEAL FOR REVIEW OF INITIAL ORDER

(1) An appeal of an initial order entered by an Administrative Judge shall be filed with the Administrative Judge in the manner specified by the Administrative Procedures Division of the Secretary of State’s office and a copy sent to the Executive Secretary. The appeal need not be in any particular form, but must:

(a) Be filed within the period of time provided for appeal in the initial order;

(b) Identify the allegedly erroneous finding(s) of fact and/or conclusion(s) of law in the initial order; and (c) Identify how the rights of the Party filing the appeal have allegedly been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

In violation of constitutional or statutory provisions;
Made upon unlawful procedures;
Arbitrary and capricious or characterized by abuse of discretion; or 4. Unsupported by evidence that is both substantial and material in light of the entire record.

(2) The Administrative Procedures Division of the Secretary of State’s office or the Executive Secretary shall acknowledge receipt in writing of any appeal under this rule.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-1506.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendment filed February 1, 2011; to have been effective May 2, 2011. On April 29, 2011, the Government Operations Committee stayed the rule for 15 days; new effective date May 17, 2011. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.15 REVIEW OF INITIAL ORDERS BY THE BOARD

(1) The Board may:

(a) Review all issues raised in an appeal or addressed in an initial order;

(b) Review some, but not all, issues raised in an appeal or addressed in an initial order;

(d) Delegate review of the initial order to one (1) or more Person(s), subject to further review by members of the Board; or (e) Decline to exercise any review, thereby allowing the initial order to become the final decision of the Board.

(2) Unless otherwise specified by the Board, appeals for review by the Board may be placed on the agenda for the next meeting of the Board if the appeal and administrative record are received by the Executive Secretary at least forty-five (45) days before the meeting.

(3) The Executive Secretary shall send notice to the Parties that their appeal is on the agenda for the next meeting of the Board within a reasonable time before the meeting. Notice shall be sent to the Parties as follows:

(a) A copy of the meeting notice and agenda shall be sent to all Parties, other than the Assessing Authority or division of property assessments, by certified mail to the mailing address provided by a Party.

(b) A copy of the meeting notice and agenda shall be mailed, by first-class mail or hand delivery, to the office of the Assessing Authority or the division of property assessments.

(4) Parties may submit written argument concerning the initial order. Written arguments must be received by the Executive Secretary no later than ten (10) days before the meeting of the Board.

(5) Unless the Board directs otherwise, an appeal for review of the initial order by the Board shall be limited to the administrative record and written argument submitted by the Parties. Parties alleging irregularities in procedure shall specifically identify any alleged irregularities with citations to the administrative record and supply copies of any additional documentation that the Party alleges shows an irregularity in procedure.

(6) Unless directed otherwise by the Board, a Party who wants to present oral argument to the Board must file a written request to present oral argument with the Executive Secretary and the request must be received by the Executive Secretary at least two (2) business days in advance of the Board meeting. If the Board grants the request to present oral argument, all Parties will be afforded three (3) minutes to present oral argument, exclusive of questions from the Board. The Board may, in its discretion, limit or expand oral argument based on time constraints or the complexity of the matter. Additional time to present oral argument may be granted within the discretion of the presiding member at the meeting of the Board where review is considered.

History

Authority: T.C.A. §§ 4-5-315, 67-1-305, and 67-5-1506.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.16 FINAL ORDERS; EFFECTIVENESS

(1) Final orders of the Board will serve as the basis of a final certificate of assessment. Initial orders of Administrative Judges shall become the final order of the Board without further action or notice unless:

(a) The Board elects to review the initial order within the time provided for appeal in the initial order; or (b) Any Party files an appeal of an initial order within the time provided for appeal in the initial order.

(2) An initial order of an Administrative Judge shall contain a clear and concise statement of the available procedures and time limits for seeking reconsideration or other administrative relief and the time limits for seeking further administrative or judicial review. An initial order will be effective upon becoming a final order in accordance with section 0600-01-.16(1) of these rules.

(3) A final order of the Board following Board review of an initial order shall be (a) Signed by the member who acted as chairperson at the meeting of the Board when review was considered; and (b) Attested by the Executive Secretary.

(4) A final order of the Board is effective as of the date that it is sent to the Parties.

History

Authority: T.C.A. § 67-1-305.
Administrative History: Original rule certified June 7, 1974. Repeal filed and effective July 1, 1984. New rule filed June 30, 2000; effective September 12, 2000. Amendments filed January 7, 2026; effective April 7, 2026.

Tenn. Comp. R. & Regs. 0600-01-.17 FEES

(1) Persons initiating a Contested Case before the Board shall pay a ten dollar ($10) nonrefundable filing fee.

(2) No fee shall be due from a Petitioner who qualifies as an indigent person for purposes of civil actions in the courts of Tennessee and who establishes indigence by filing a uniform affidavit in the form stated in Rule 29 of the Rules of the Supreme Court of Tennessee. No fee shall be due from a Petitioner who has attained the age of sixty-five (65) years at the time of filing the appeal where the subject property of the appeal is owned by the Petitioner and used as the Petitioner’s primary residence and has a value not in excess of $150,000.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-1501(d).
Administrative History: Original rule filed April 30, 2004; effective July 14, 2004. Amendments file February 1, 2011; to have been effective May 2, 2011. On April 29, 2011, the Government Operations Committee stayed the rule for 15 days; new effective date May 17, 2011. Amendment filed August 24, 2015; effective November 22, 2015. Amendments filed July 5, 2017; effective October 3, 2017. Amendments filed May 12, 2020; effective August 10, 2020. Amendments filed January 7, 2026; effective April 7, 2026.

Chapter 0600-02 Rules of Procedure for Hearing Contested Cases

Tenn. Comp. R. & Regs. 0600-02 Rules of Procedure for Hearing Contested Cases

RULES

OF TENNESSEE STATE BOARD OF EQUALIZATION

For Rules of Procedure for Hearing Contested Cases see Rules of the Secretary of State, Chapter 1360-1-7.

Authority: T.C.A. Section §4-509. Administrative History. Original Chapter filed November 22, 1978, effective January 8, 1979. -- 1 of 1 --

Chapter 0600-03 Tax Relief

Tenn. Comp. R. & Regs. 0600-03-.01 DETERMINATION OF REIMBURSABLE STATE OR LOCAL PROPERTY TAXES

PROVIDED BY TAX RELIEF PROGRAM. The State Board of Equalization through the Division of Property Assessments is responsible, under T.C.A. §§ 67-5-701 through 67-5-704, for establishing rules and regulations for implementation of the tax relief program.

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Amendments filed July 5, 2017; effective October 3, 2017.

Tenn. Comp. R. & Regs. 0600-03-.02 DEFINITIONS

For purposes of tax relief rules and regulations:

(1) "Affidavit" is hereby defined as a notarized statement under oath.

(2) “Application credit voucher” (herein referred to as ACV) is (a) the tax relief application approved by the Division of Property Assessments for use in tax years subsequent to a recipient’s initial year of tax relief, and (b) a voucher to be used for payment of taxes by a tax relief recipient in subsequent years of eligibility.

(3) “Collecting Official” means the county trustee, or in the case of taxes due a municipality, the county trustee or other official responsible for collection of property taxes.

(4) "Disability", with respect to a non-veteran, is hereby defined as the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

(5) "Disbursement voucher" (herein referred to as DV) is the form approved by the Division of Property Assessments for use as the taxpayer's initial application for tax relief and for application in subsequent years if the taxpayer did not use the ACV in a prior year.

(6) “Division” or “Division of Property Assessments” shall mean the Division of Property Assessments in the Office of the Comptroller of the Treasury created by T.C.A. § 67-1-201.

(7) “Residence” or “Principal Residence” means the dwelling owned and used by the taxpayer as the taxpayer’s legal residence during some part of the given tax year for which tax relief is requested.

(8) “Submission Date” means the deadline for submission of applications for refunds or presentment of credit vouchers set forth in T.C.A. § 67-5-701(d)(2).

(9) "Taxpayer" is hereby defined to be the applicant, except for determination of income.

(10) "Tax year" means the period of January 1 through December 31 of the year in which property taxes become due.

(11) “U.S. Department of Veterans Affairs Aid and Attendance” means that benefit provided to certain veterans under the criteria set forth in 38 C.F.R. § 3.352.

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-5-5103, and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Amendment filed June 16, 1995; effective August 30, 1995. Amendment filed May 11, 2009; effective July 25, 2009. Amendments filed July 5, 2017; effective October 3, 2017.

Tenn. Comp. R. & Regs. 0600-03-.03 AGE REQUIREMENT

A taxpayer, in order to satisfy the property tax relief minimum age requirement, must attain age sixty-five (65) on or before December 31 of the year for which property tax relief is requested. Acceptable evidence may include, but is not limited to, (a) copy of birth certificate; (b) copy of a valid driver’s license; (c) copy of Medicare card; (d) copy of marriage certificate which states the taxpayer’s age; (e) copy of valid passport; (f) copy of valid military ID; or (g) copy of valid census record. Acceptable evidence will include verification of the date of birth provided by the Social Security Administration either by direct access or mail.

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Amendment filed May 11, 2009; effective July 25, 2009. Amendments filed July 5, 2017; effective October 3, 2017.

Tenn. Comp. R. & Regs. 0600-03-.04 DISABILITY REQUIREMENT (NON-VETERAN)

A taxpayer, in order to satisfy property tax relief disability requirements, must be totally and permanently disabled during the tax year, and provide evidence of same no later than the Submission Date.

Acceptable evidence is written verification from (a) the Social Security Administration, (b) the Tennessee Department of Human Services, (c) U.S. Department of Veterans Affairs, (d) the Railroad Retirement Board, or (e) the duly constituted authority of any governmental or private entity which does not participate in the Social Security system. Acceptable evidence will include verification of the current disability status provided by the Social Security Administration either by direct access or mail. A duly constituted authority shall be any official body which would be recognized under law to grant benefits to an employee of that entity based on total and permanent disability.

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-5-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Amendment filed June 16, 1995; effective August 30, 1995. Amendment filed May 11, 2009; effective July 25, 2009. Amendments filed July 5, 2017; effective October 3, 2017.

Tenn. Comp. R. & Regs. 0600-03-.05 REPEALED

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Amendment filed December 30, 1988; effective February 13, 1989. Repeal filed May 11, 2009; effective July 25, 2009.

Tenn. Comp. R. & Regs. 0600-03-.06 WIDOW(ER) OF DISABLED VETERAN REQUIREMENT

(1) Evidence required of a surviving spouse of a disabled veteran for tax relief will be (1) written verification from the U.S. Department of Veterans Affairs confirming the deceased veteran’s disability; (2) a copy of the disabled veteran’s death certificate; (3) ownership documentation; and (4) a form of identification for the surviving spouse, such as a copy of a valid driver’s license, Medicare card, social security card, or valid military ID card.

(2) Where tax relief is extended to the surviving spouse of a veteran whose death results from a service-connected, combat-related cause, as determined by the U.S. Department of Veterans Affairs, evidence required of the surviving spouse shall be a copy of the veteran’s death certificate or other evidence submitted and approved by the Division that offers reasonable proof of death.

History

Authority: Tennessee Constitution Article II §28; T.C.A. §§ 67-670 through 67-673, 4-3-5103, 67-5-701 through 67-5-704, and Public Chapter Number 127, Public Acts 1983.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 30, 1988; effective February 13, 1989. Amendment filed May 11, 2009; effective July 25, 2009. Amendments filed July 5, 2017; effective October 3, 2017.

Tenn. Comp. R. & Regs. 0600-03-.07 CERTIFICATION OF OWNERSHIP AND RESIDENCY

(1) A taxpayer, in order to qualify for property tax relief must have owned and used the property as his or her residence during some part of the given tax year for which tax relief is requested. Under no condition shall any taxpayer receive tax relief for property taxes paid on more than one (1) principal residence for any tax year. Evidence of ownership is required and must accompany the application. Acceptable evidence of ownership shall be the following:

(a) For a DV, a copy of the current year tax notice or receipt for each jurisdiction for which tax relief is requested;

(b) The completed ownership and income information on the DV or ACV; and (c) The completed certification of reasonable care by the collecting official on the DV or ACV.

(2) For the DV, before completing the certification, the collecting official must establish the following:

(a) That the applicant is an owner as shown on the current year tax notice or receipt and the type of ownership interest; or if the applicant's name does not appear on the tax notice or receipt, the qualifications of the individual to apply for tax relief and the type of ownership must be evidenced. The taxpayer must establish that he or she was an owner of the property during the tax year, by evidence submitted no later than the Submission Date following the delinquency date for the tax jurisdiction.

(b) That the taxpayer was told to report the prior year’s income of all owners of the property.

(c) That the authority to sign for the owner was established if someone other than the property owner applied or signed the application and a copy of the documentation was provided.

(3) For the ACV, before completing the certification, the collecting official must establish that the applicant reported information consistent with that of prior years and that there is no reason to believe the applicant misunderstood the instructions.

(4) Other considerations of Ownership Verification are as follows:

(a) Life Estate. A holder of a life estate may be eligible for tax relief. If the life estate is not shown on the tax receipt, acceptable evidence must be provided. Acceptable evidence will be a recorded property deed or other recorded conveyance.

(b) Surviving spouse of deceased taxpayer. If the surviving spouse is not eligible to receive tax relief in future years and the payment is a final one for the year of death of the spouse, a death certificate or an affidavit, in a format approved by the Division, can be attached to an ACV and credit given by the collecting official.

(c) Mobile Home Owner. An eligible taxpayer owning and whose principal residence is a mobile home may obtain tax relief if the following is provided in addition to the taxpayer’s application:

A title or bill of sale;
In the event the taxpayer does not own the land, a form, in a format approved by the Division, from the assessor showing the appraised and assessed value of the mobile home; and 3. A copy of the tax receipt.

(d) Property Located in More than One County. When a property is divided by a county boundary(ies) tax relief will be calculated on the rate for the jurisdiction where the residence is located. Property tax relief will be paid only in the county where the residence is located.

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5l03 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Amendment filed July 13, 1987; effective August 27, 1987. Amendment filed December 30, 1988; effective February 13, 1989. Amendment filed May 11, 2009; effective July 25, 2009. Amendments filed July 5, 2017; effective October 3, 2017.

Tenn. Comp. R. & Regs. 0600-03-.08 INCOME REQUIREMENT

(1) A taxpayer, in order to satisfy the income requirement, must not receive a yearly income in excess of the statutory limit. The yearly income will be the total combined income of all property owners for the calendar year prior to the tax year for which property tax relief is requested. ALL income must be included.

(2) The annual income declared by the taxpayer is subject to audit control which will include, but is not limited to, comparison of the income amount to social security benefits received for the prior year. The collecting official must place emphasis on the declaration of ALL income.

(3) Annual income from all sources shall include, but is not limited to, social security payments after the Medicare deduction, social security disability after the Medicare deduction, supplemental security income, retirement and pension benefits after deduction of healthcare insurance premiums, veteran’s benefits, worker’s compensation, unemployment compensation, salaries and wages, alimony, total interest and total dividends. For income from a business, farm, rental property, estate settlement, sale of securities, or other comparable source, include only the net income or loss after expenses. Documentation of the loss must be provided with the application. Gain or loss from the sale of a principal residence, Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Program, child support, and U.S. Department of Veterans Affairs Aid and Attendance shall not be considered income. Except as otherwise provided by statute or these rules, determinations regarding the income of an applicant or owners of property shall be guided by the federal income tax requirements for determining income. When determining the income using a tax return, the adjusted gross income amount is used. This amount is added to any income sources specified above which may not be taxable by IRS standards.

(4) Social Security, Railroad Retirement benefits, and U.S. Department of Veterans Affairs benefits that are required to be paid to a nursing home for the care of the taxpayer’s spouse, or co-owner(s), shall not be considered as income.

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Amendment filed December 30, 1988; effective February 13, 1989. Amendment filed June 16, 1995; effective August 30, 1995. Amendment filed May 11, 2009; effective July 25, 2009. Amendments filed July 5, 2017; effective October 3, 2017.

Tenn. Comp. R. & Regs. 0600-03-.09 METHODS OF APPLICATION

The Division of Property Assessments shall develop methods for taxpayers to apply for tax relief.

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Amendment filed May 11, 2009; effective July 25, 2009.

Tenn. Comp. R. & Regs. 0600-03-.10 REPEALED

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Amendment filed July 13, 1987; effective August 27, 1987. Amendment filed September 14, 1990; effective October 29, 1990. Repeal filed May 11, 2009; effective July 25, 2009.

Tenn. Comp. R. & Regs. 0600-03-.11 ACCEPTANCE OF PROPERTY TAX RELIEF APPLICATIONS

(1) Postmark.

(a) Applications which are submitted by mail to the collecting official from the applicant must be postmarked no later than thirty-five (35) days from the date taxes in the jurisdiction become delinquent for that year.

(b) Applications which are to be submitted by the collecting official to the State must be postmarked no later than the Submission Date following the delinquency date for the tax jurisdiction.

(2) Mortgage Escrow Accounts. Taxpayers whose property tax is paid through a mortgage escrow account will not be penalized by failure of the mortgage company to release property tax payments to the collecting official by the delinquency date. The collecting official will accept the taxpayer’s application (DV or ACV) if submitted within thirty-five (35) days from the date taxes in the jurisdiction become delinquent for that year and hold same until payment is received from the mortgage company. The application will then be submitted for payment.

(3) Mobile Home. Taxpayers whose property tax is paid by a mobile home park owner will not be penalized by failure of the park owner to pay the property taxes by the delinquency date.

The collecting official will accept the taxpayer's application (DV or ACV) if submitted within thirty-five (35) days from the date taxes in the jurisdiction become delinquent for that year and hold same until payment is received from the mobile home park owner. The application will then be submitted for payment.

(4) Installment or Partial Payments. Collecting officials who accept partial or installment payments from taxpayers who are qualified to receive property tax relief will accept the taxpayer’s application (ACV) if presented within thirty-five (35) days from the date taxes in the jurisdiction become delinquent for that year and hold same until the final payment is made by the taxpayer and ensure that the following requirements are met:

(a) Credit shall not be extended on an ACV to a taxpayer until the final installment is due and payable;

(b) The final payment must be received by the jurisdiction within the inclusive period for installment payments to be made for a given year as established by law for the jurisdiction;

(c) Any ACV held for completion of installment or partial payments shall then be submitted promptly to the State for reimbursement so that the ACV’s for the subsequent tax year may be selected by the State before tax collecting begins; and (d) A copy of the final receipt showing that all taxes have been paid for a given tax year shall be attached to any ACV submitted for payment.

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Amendment filed December 30, 1988; effective February 13, 1989. Amendment filed June 16, 1995; effective August 30, 1995. Amendment filed May 11, 2009; effective July 25, 2009. Amendments filed July 5, 2017; effective October 3, 2017.

Tenn. Comp. R. & Regs. 0600-03-.12 APPEAL PROCEDURE

The State Board of Equalization will conduct in the manner otherwise provided by law a hearing regarding the complaint and appeal of any person arising from the action of the collecting official or the Division of Property Assessments.

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987.

Tenn. Comp. R. & Regs. 0600-03-.13 EFFECTIVE DATE OF RULES

These rules shall take effect on November 14, 1983.

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987.

Tenn. Comp. R. & Regs. 0600-03-.14 REPEALED

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Repeal filed May 11, 2009; effective July 25, 2009.

Tenn. Comp. R. & Regs. 0600-03-.15 REPEALED

History

Authority: Tennessee Constitution Article II, T.C.A. §§ 4-3-5103 and 67-5-701 through 67-5-704.
Administrative History: Original rule filed February 12, 1982; effective April 1, 1982. Repeal and new rule filed October 14, 1983; effective November 14, 1983. Amendment filed December 1, 1986; effective January 15, 1987. Amendment filed July 31, 1987; effective August 27, 1987. Repeal filed May 11, 2009; effective July 25, 2009.

Chapter 0600-04 Assessment Certification and Education Program

Tenn. Comp. R. & Regs. 0600-04-.01 DEFINITIONS

As used in these Rules, unless the context otherwise requires:

(1) “AAS” means the Assessment Administration Specialist professional assessment designation of the IAAO.

(2) “Board” means the Tennessee State Board of Equalization.

(3) “CAE” means the Certified Assessment Evaluator professional assessment designation of the IAAO.

(4) “Certified General Real Estate Appraiser” means the certification issued by the Tennessee Real Estate Appraiser Commission.

(5) “CMS” means the Cadastral Mapping Specialist professional assessment designation of the IAAO.

(6) “Division” means the Division of Property Assessments in the Office of the Comptroller of the Treasury.

(7) “Executive Secretary” means the Executive Secretary of the Tennessee State Board of Equalization or his or her designee.

(8) “IAAO” means the International Association of Assessing Officers.

(9) “MAS” means the Mass Appraisal Specialist professional assessment designation of the IAAO.

(10) “PPS” means the Personal Property Specialist professional assessment designation of IAAO.

(11) “Program” means the Assessment Certification and Education Program.

(12) “RES” means the Residential Evaluation Specialist professional assessment designation of the IAAO.

(13) “TCA” means Tennessee Certified Assessor.

(14) “TMA” means Tennessee Master Assessor.

History

Authority: T.C.A. §§ 67-1-305 and 67-1-508 through 67-1-510.
Administrative History: New rule filed August 17, 2021; effective November 15, 2021.

Tenn. Comp. R. & Regs. 0600-04-.02 GENERAL REQUIREMENTS FOR CANDIDACY

(1) Any person who wishes to apply for candidacy in the Program must:

(a) Be at least eighteen (18) years of age;

(b) Be actively employed in the field of property assessments for ad valorem tax purposes by a state, county, or municipal government agency;

(c) Complete and submit to the Division an application for candidacy; and (d) Agree to abide by the rules and regulations governing this Program.

(2) The application for candidacy must include the following:

(a) Evidence of the applicant’s active employment in the field of property assessments, such as a letter from the applicant’s employer noting the applicant’s dates of employment, or other evidence deemed acceptable by the Division; and (b) Proof of the applicant’s successful completion of each course required for the soughtafter level of certification. Acceptable evidence includes, but is not limited to:

A certificate of completion;
A pass-fail form;
A grade-report form;
A letter provided by the administrator of the course indicating the applicant’s successful completion;
A uniform request for recertification credit form signed by the instructor or agency sponsoring the course; or 6. Any other evidence deemed acceptable by the Division.

(3) No single course may be used to satisfy more than one certification level requirement.

(4) Courses unrelated to the identification of the appraisal will not be considered for certification.

(5) Following receipt of a completed application for candidacy and evidence that requirements for a certification have been met, the Division shall determine the certification date for purposes of Rule 0600-04-.11 and notify the candidate in writing of the certification date, or otherwise notify the candidate of any deficiencies within the application or of any requirements that have not been met.

History

Authority: T.C.A. §§ 67-1-305 and 67-1-508 through 67-1-510.
Administrative History: Original rule filed December 20, 1983; effective January 19, 1984. Amendment filed September 13, 1993; effective November 27, 1993. Amendment filed August 14, 1996; effective October 28, 1996. Amendments filed June 22, 2005; effective September 5, 2005. Amendments filed September 25, 2014; effective December 24, 2014. Rule was previously numbered 0600-04-.01 but was renumbered 0600-04-.02 with the introduction of a new rule 0600-04-.01 filed August 17, 2021; effective November 15, 2021. Amendments filed August 17, 2021; effective November 15, 2021.

Tenn. Comp. R. & Regs. 0600-04-.03 and 0600-04-.04 above;

(b) Has at least two (2) years of full-time employment in the field of property assessments for ad valorem tax purposes by a state, county, or municipal government agency;

IAAO Course 300 – Fundamentals of Mass Appraisal;
IAAO Course 400 – Assessment Administration;
IAAO Course 600 – Cadastral Mapping; or 4. IAAO Course 601 – Cadastral Mapping: Methods & Applications;

(d) Received a passing grade on the examination for IAAO Workshop 151 – Uniform Standards of Professional Appraisal Practice;

(e) Received a passing grade on the comprehensive exam administered by the Division; and (f) Received a passing grade on either:

A case study examination administered by the Division addressing the recognized approaches to value on a single-family residence; or 2. A narrative demonstration appraisal report administered by IAAO related to residential property.

(2) Additionally, any person holding a Level III (TCA) certification or higher must meet all continuing education requirements established below in Rule 0600-04-.09.

History

Authority: T.C.A. §§ 67-1-305 and 67-1-508 through 67-1-510.
Administrative History: Original rule filed December 20, 1983; effective January 19, 1984. Amendment filed September 13, 1993; effective November 27, 1993. Amendment filed June 22, 2005; effective September 5, 2005. Repeal and new rule filed September 25, 2014; effective December 24, 2014. Rule was previously numbered 0600-04-.04 but was renumbered 0600-04-.05 with the introduction of a new rule 0600-04-.01 filed August 17, 2021; effective November 15, 2021. Amendments filed August 17, 2021; effective November 15, 2021.

Tenn. Comp. R. & Regs. 0600-04-.04 ASSESSMENT LEVEL II – CERTIFICATION REQUIREMENTS

In addition to completing all general requirements established in Rule 0600-04-.02 above, a candidate for Level II certification must provide evidence that the candidate:

(1) Completed all Level I certification requirements established under Rule 0600-04-.03 above;

(2) Has at least one (1) year of full-time employment in the field of property assessments for ad valorem tax purposes by a state, county, or municipal government agency;

(3) Received a passing grade on the examination for IAAO Course 102 – Income Approach to Valuation; and (4) Received a passing grade on the examination for one (1) of the following:

(a) IAAO Course 400 – Assessment Administration;

(b) IAAO Course 600 – Principles and Techniques of Cadastral Mapping; or (c) IAAO Course 601 – Cadastral Mapping: Methods & Applications.

History

Authority: T.C.A. §§ 67-1-305 and 67-1-508 through 67-1-512.
Administrative History: Original rule filed December 20, 1983; effective January 19, 1984. Amendment filed September 13, 1993; effective November 27, 1993. Amendment filed June 22, 2005; effective September 5, 2005. Amendment filed September 25, 2014; effective December 24, 2014. Rule was previously numbered 0600-04-.03 but was renumbered 0600-04-.04 with the introduction of a new rule 0600-04-.01 filed August 17, 2021; effective November 15, 2021. Amendments filed August 17, 2021; effective November 15, 2021.

Tenn. Comp. R. & Regs. 0600-04-.05 ASSESSMENT LEVEL III (TCA) – CERTIFICATION REQUIREMENTS

(1) In addition to completing all general requirements established in Rule 0600-04-.02 above, a candidate for Level III (TCA) certification must provide evidence that the candidate:

(a) Completed all Level I and Level II certification requirements established under Rules

Tenn. Comp. R. & Regs. 0600-04-.06 ASSESSMENT LEVEL IV – CERTIFICATION REQUIREMENTS

(1) In addition to completing all general requirements established in Rule 0600-04-.02 above, a candidate for Level IV certification must provide evidence that the candidate:

(a) Completed all Level I, Level II, and Level III (TCA) requirements established under Rules 0600-04-.03, 0600-04-.04, and 0600-04-.05 above;

(b) Has at least three (3) years of full-time employment in the field of property assessments for ad valorem tax purposes by a state, county, or municipal government agency;

(c) Received a passing grade on the examination for IAAO Course 311 – Real Property Modeling Concepts; and (d) Received a passing grade on the examination for one of the following:

IAAO Course 201 – Appraisal of Land;
IAAO Course 400 – Assessment Administration;
IAAO Course 500 – Assessment of Personal Property;
IAAO Course 600 – Principles and Techniques of Cadastral Mapping; or 5. IAAO Course 601 – Cadastral Mapping: Methods & Applications.

(2) Additionally, any person holding a Level III (TCA) certification or higher must meet all continuing education requirements established below in Rule 0600-04-.09.

History

Authority: T.C.A. §§ 67-1-305 and 67-1-508 through 67-1-512.
Administrative History: Original rule filed December 20, 1983; effective January 19, 1984. Amendment filed September 13, 1993; effective November 27, 1993. Amendment filed June 22, 2005; effective September 5, 2005. Amendment filed September 25, 2014; effective December 24, 2014. Rule was previously numbered 0600-04-.05 but was renumbered 0600-04-.06 with the introduction of a new rule 0600-04-.01 filed August 17, 2021; effective November 15, 2021. Amendments filed August 17, 2021; effective November 15, 2021.

Tenn. Comp. R. & Regs. 0600-04-.07 ASSESSMENT LEVEL V (TMA) – CERTIFICATION REQUIREMENTS

(1) In addition to completing all general requirements established in Rule 0600-04-.02 above, a candidate for Level V (TMA) certification must provide evidence that the candidate has met one (1) or more of the following requirements:

(a) The candidate:

Has completed all Level I, Level II, Level III (TCA), and Level IV requirements established under Rules 0600-04-.03, 0600-04-.04, 0600-04.05, and 0600-04-.06 above;
Has at least four (4) years of full-time experience in the field of property assessments for ad valorem tax purposes by a state, county, or municipal government agency; and 3. Received a passing grade on the examination for IAAO Course 112 – Income Approach to Valuation II; or (b) The candidate:
Maintains a State Certified General Real Estate Appraiser certification through the Tennessee Real Estate Appraiser Commission, as evidenced by a current certificate and letter of good standing issued by the Tennessee Real Estate Appraiser Commission;
As of the date of application, has at least two (2) years of full-time experience in the field of property assessments for ad valorem tax purposes by a state, county, or municipal government agency;
Received a passing grade on the examination for the Division’s Tennessee Assessment Law Workshop; and 4. Received a passing grade on the examination for the Division’s Appraisal Fundamentals Workshop; or (c) The candidate maintains an AAS, CAE, CMS, MAS, PPS, or RES designation through IAAO, as evidenced by a copy of the certificate and confirmation of good standing issued by IAAO.

(2) Additionally, any person holding a Level III (TCA) certification or higher must meet all continuing education requirements established below in Rule 0600-04-.09.

History

Authority: T.C.A. §§ 67-1-305 and 67-1-508 through 67-1-510.
Administrative History: Original rule filed December 20, 1983; effective January 19, 1984. Amendment filed September 13, 1993; effective November 27, 1993. Repeal and new rule filed June 22, 2005; effective September 5, 2005. Repeal and new rule filed September 25, 2014; effective December 24, 2014. Rule was previously numbered 0600- 04-.06 but was renumbered 0600-04-.07 with the introduction of a new rule 0600-04-.01 filed August 17, 2021; effective November 15, 2021. Amendments filed August 17, 2021; effective November 15, 2021.

Tenn. Comp. R. & Regs. 0600-04-.08 RETIREMENT OF CERTIFICATION

The certification of any person who leaves employment in the field of property assessments for ad valorem tax purposes by a state, county, or municipal government agency shall be retired. The Division will not maintain Program records related to retired certifications. An individual may reactivate his or her certification upon the Division’s acceptance of evidence that he or she has resumed employment in the field of property assessments for ad valorem tax purposes with a state, county, or municipal government agency and is in compliance with all continuing education requirements. Such evidence includes:

(1) A letter from the individual’s employer; and (2) A certificate of completion; a pass-fail form; a grade-report form; a letter of successful completion; a uniform request for recertification credit form signed by the instructor or agency sponsoring the course; or any other evidence approved by the Division.

History

Authority: T.C.A. §§ 67-1-305 and 67-1-508 through 67-1-510.
Administrative History: Original rule filed August 14, 1996; effective October 28, 1996. Repeal and new rule filed September 25, 2014; effective December 24, 2014. Rule was previously numbered 0600-04-.07 but was renumbered 0600-04- .08 with the introduction of a new rule 0600-04-.01 filed August 17, 2021; effective November 15, 2021. Amendments filed August 17, 2021; effective November 15, 2021.

Tenn. Comp. R. & Regs. 0600-04-.09 CONTINUING EDUCATION PROCEDURES

(1) The objective of the Program is to encourage professional advancement through education to ensure continuing exposure to new developments in the field of property assessments.

Continuing education requirements are based solely on attendance and a passing grade for courses offering exams or instruction as approved by the Division.

(2) Beginning on January 1 of the year following issuance of a certification, any person who receives a Level III (TCA) certification or higher must attend and successfully complete fifty (50) hours of continuing education approved by the Division. At least fifty (50) hours of education must be successfully completed every five (5) years for a certification to remain active.

(3) Acceptable evidence of continuing education includes:

(a) A certificate of completion;

(b) A pass-fail form;

(d) A letter of successful completion;

(e) A uniform request for recertification credit form signed by the instructor or agency sponsoring the course; or (f) Any other evidence approved by the Division.

(4) The Division will maintain a list of approved courses for the purposes of continuing education.

Other courses related to the field of property assessments may be approved for continuing education at the Division’s discretion. The Executive Secretary may extend the period for completion of continuing education requirements, or modify reinstatement requirements as appropriate, where the certification holder is prevented from meeting the deadline by circumstances beyond his or her control.

(5) Requests for continuing education credit must be submitted to the Division no later than December 31 of the fifth year following issuance of the certification and every five (5) years thereafter. Following receipt of a request for continuing education credit, the Division shall promptly notify the applicant in writing whether the continuing education credit has been approved and the number of hours granted.

History

Authority: T.C.A. §§ 67-1-305 and 67-1-508 through 67-1-510.
Administrative History: Original rule filed December 20, 1983; effective January 19, 1984. Amendment filed September 13, 1993; effective November 27, 1993. Amendment filed August 14, 1996; effective October 28, 1996. Amendment filed June 22, 2005; effective September 5, 2005. Repeal and new rule filed September 25, 2014; effective December 24, 2014. Rule was previously numbered 0600-04-.08 but was renumbered 0600-04-.09 with the introduction of a new rule 0600-04-.01 filed August 17, 2021; effective November 15, 2021. Amendments filed August 17, 2021; effective November 15, 2021.

Tenn. Comp. R. & Regs. 0600-04-.10 PROGRAM SCOPE AND INTENT – PROGRAM ADMINISTRATION

(1) The Program provides educational opportunities in the field of property assessments and recognition of accumulated training and experience for property assessment professionals.

(2) Certification is reserved for individuals employed by state, county, or municipal government agencies with property tax assessment responsibilities. The Division will only consider applications from individuals meeting the criteria outlined in Rule 0600-04-.02 above.

(3) The Division shall administer the Program on behalf of the Board subject to the grievance clause contained in these Rules.

(4) The Division may approve substitutions for courses or workshops referenced in these Rules that have been discontinued, replaced, or renamed. The Division shall promptly report any such substitutions to the Executive Secretary.

History

Authority: T.C.A. §§ 67-1-305 and 67-1-508 through 67-1-510.
Administrative History: Original rule filed August 14, 1996; effective October 28, 1996. Rule was previously numbered 0600-04-.09 but was renumbered 0600-04-.10 with the introduction of a new rule 0600-04-.01 filed August 17, 2021; effective November 15, 2021. Amendments filed August 17, 2021; effective November 15, 2021.

Tenn. Comp. R. & Regs. 0600-04-.11 INCENTIVE COMPENSATION FOR ASSESSING OFFICIALS

(1) Where an individual is eligible for receipt of incentive compensation as a result of having met all requirements for certification as provided in these Rules, such compensation shall not exceed the maximum amount authorized for assessors and deputy assessors under T.C.A. § 67-1-508.

(2) The Board may annually authorize such compensation upon receipt of verification of the certification date from the Division.

(3) The Board may authorize prorated compensation based upon the date of certification and receipt of recommendation from the Division; however, an individual whose employment is terminated, other than by retirement, prior to the end of the fiscal year shall not be entitled to prorated compensation.

History

Authority: T.C.A. §§ 67-1-305 and 67-1-508 through 67-1-510.
Administrative History: Original rule filed December 20, 1983; effective January 19, 1984. Amendment filed September 13, 1993; effective November 27, 1993. Amendment filed August 14, 1996; effective October 28, 1996. Amendment filed September 25, 2014; effective December 24, 2014. Rule was previously numbered 0600-04-.10 but was renumbered 0600-04-.11 with the introduction of a new rule 0600-04-.01 filed August 17, 2021; effective November 15, 2021. Amendments filed August 17, 2021; effective November 15, 2021.

Tenn. Comp. R. & Regs. 0600-04-.12 GRIEVANCE CLAUSE

All persons having any grievance resulting or arising from the Program or these Rules may apply to the Executive Secretary for a hearing. The request for hearing must be in writing and submitted within thirty (30) days of the event or discovery of the event which gave rise to the grievance. The request for the hearing must specify the grievance alleged and the relief requested. If relief is not granted, the petitioning party may appeal to the Board or the Assessment Appeals Commission within thirty (30) days and shall have the right to present his or her case, and to be represented by counsel, at a time and place fixed by the Board or Assessment Appeals Commission. Reasonable notice shall be given to the petitioning party prior to the hearing date.

History

Authority: T.C.A. §§ 67-1-305 and 67-1-509 through 67-1-512.
Administrative History: Original rule filed December 20, 1983; effective January 19, 1984 (Formerly 0660-04-.10). Rule was previously numbered 0600-04-.11 but was renumbered 0600-04-.12 with the introduction of a new rule 0600-04-.01 filed August 17, 2021; effective November 15, 2021. Amendments filed August 17, 2021; effective November 15, 2021.

Tenn. Comp. R. & Regs. 0600-04-.13 REPEALED

History

Authority: T.C.A. §§ 67-1-305 and 67-1-508 through 67-1-510.
Administrative History: Original rule filed December 20, 1983; effective January 19, 1984. Amendment filed September 13, 1993; effective November 27, 1993. Amendment filed August 14, 1996; effective October 28, 1996. Repeal and new rule filed June 22, 2005; effective September 5, 2005. Repeal filed September 25, 2014; effective December 24, 2014. Rule was previously numbered 0600-04-.12 but was renumbered 0600-04-.13 with the introduction of a new rule 0600-04-.01 filed August 17, 2021; effective November 15, 2021.

Chapter 0600-05 Assessment of Commercial and Industrial Tangible Personal Property

Tenn. Comp. R. & Regs. 0600-05-.01 DEFINITIONS

(1) “Adjusted assessment” shall be defined as any assessment made by the assessor on personal property at a value different from the value reported by the taxpayer or based on information different from the information reported by the taxpayer for the current year.

(2) “Capitalized repair” means costs that are capitalized on the taxpayer’s financial books and records as a fixed asset and either:

(a) Add to the value or substantially prolong the useful life of property; or (b) Adapt the property to a new or different use.

(3) “Commercial and industrial tangible personal property”, as defined by T.C.A. § 67-5-501(2), includes personal property such as goods, chattels, and other articles of value which are capable of manual or physical possession, and machinery and equipment which is:

(a) Used essentially and principally for the commercial or industrial purposes or processes for which it is intended; and (b) If affixed or attached to real property, can be detached without material injury to such real property.

(4) “Construction-in-process tangible personal property (CIP)” shall be defined as tangible personal property which as of the assessment date is undergoing construction, assembly or installation prior to being committed to use.

(5) “Fair market value” of personal property shall be ascertained in accordance with T.C.A. §§ 67-5-601 and 602.

(6) “Forced assessment” shall be defined as any assessment made on personal property when the taxpayer has failed to file a personal property schedule with the assessor for the current year, whether or not the assessment is the same as the previous year.

(7) “Personal property”, as defined by T.C.A. § 67-5-501(7), includes every species and character of property which is not classified as real property.

(8) “Raw material” shall be defined as items of tangible personal property, crude or processed, which are held or maintained by a taxpayer for use through refining, combining, or any other process in the production or fabrication of another item or product. The determination of whether tangible personal property should be classified as raw material depends on the taxpayer’s use of the property and not on the nature or character of the taxpayer’s business.

Tangible personal property may be classified as raw material in the hands of the taxpayer even if the taxpayer is not considered to be a manufacturer under other Revenue code provisions.

(9) “Regular assessment” shall be defined as an assessment made on personal property when the taxpayer has filed a personal property schedule with the assessor for the current year and the assessment is based on the information reported by the taxpayer.

(10) “Residual value” shall be defined as the minimum standard value of property in use or capable of use.

(11) “Scrap value” shall be defined as the value of personal property no longer capable of use and for which there is no reasonable expectation of repair.

(12) “Straight line depreciation” for tangible personal property shall be defined as depreciation allocated in equal percentages over the economic life of the property and shall be calculated by dividing 100% by the economic life to achieve a yearly depreciation percentage. Percent good factors, also termed depreciation factors, derived from these yearly depreciation percentages shall be rounded to the nearest whole percent.

(13) “Supplies” shall be defined as expendable items of tangible personal property which are used or held for use in support of a business activity, including but not limited to office supply stocks, stocks of spare parts for maintenance of machinery and equipment, accessories used in manufacturing processes, printing supplies, and cleaning and maintenance supplies.

(14) “Tangible personal property”, as defined by T.C.A. § 67-5-501(12), includes personal property such as goods, chattels, and other articles of value which are capable of manual or physical possession, and certain machinery and equipment, separate and apart from any real property, and whose value is intrinsic to the article itself.

(15) “Total acquisition cost” means the full acquisition cost new of personal property and includes freight, installation, set-up, and sales tax.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-902.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988. Amendment filed August 17, 1994; effective October 31, 1994. Amendments filed February 21, 2017; effective May 22, 2017.

Tenn. Comp. R. & Regs. 0600-05-.02 DISCOVERY

(1) As a minimum, the following sources shall be used in order to discover potential commercial and industrial personal property taxpayers:

(a) Either a business license listing (which may be obtained from the county clerk) or a sales tax registrant listing (which may be obtained from the Sales and Use Tax Division of the Tennessee Department of Revenue);

(b) The commercial and industrial real property assessment roll;

(2) The following additional sources are recommended for use whenever possible for the discovery of businesses:

(a) Field visits;

(b) Internet;

(d) Media news and advertising;

(e) City directory;

(f) Local business directory;

(g) Chamber of commerce;

(h) Building permits and electrical inspections;

(i) Commercial vehicle license plates;

(j) Uniform commercial code filings;

(k) Any other pertinent sources.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-902.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988. Amendments filed February 21, 2017; effective May 22, 2017.

Tenn. Comp. R. & Regs. 0600-05-.03 CONTROL RECORDS

(1) An appropriate personal property control record (such as a control card) shall exist and be maintained for each personal property account.

(2) Upon discovery of a new business, a control record shall be created for that business.

(3) When a business ceases to exist, the control record for that business shall be removed from the active file and placed in an inactive file.

(4) As a minimum, the control record for each account shall provide for the following:

(a) Business name;

(b) Property location;

(d) Type of business;

(e) Property identifier, to be linked to the property identifier of the real property where the personal property is located, when such can be determined;

(f) Tax year;

(g) Dates the schedule was furnished, returned, and desk audited;

(h) Date of any field audit;

(i) Assessment ratio (30% for commercial and industrial tangible personal property);

(j) Assessment;

(k) Type of assessment (such as R = regular, F = forced, A = adjusted).

History

Authority: T.C.A. § 67-5-902.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988.

Tenn. Comp. R. & Regs. 0600-05-.04 REPORTING

(1) The tangible personal property schedule adopted in Rule 0600-05-.11 below shall be furnished annually by the assessor to every potential commercial and industrial personal property taxpayer on or before February 1. A substantially equivalent form may be used, provided that such form is approved by the Division of Property Assessments.

(2) The taxpayer shall annually be required to complete, sign, and file the tangible personal property schedule with the assessor on or before March 1. Failure to file the schedule will subject the taxpayer to a penalty as provided by state law.

(3) In accordance with T.C.A., Title 67, the following types of tangible personal property are not to be reported or assessed;

(a) Growing crops;

(b) The direct product of the soil in the hands of the producer or his immediate vendee;

(d) Inventories of merchandise held for sale or exchange;

(e) Property in transit through the state to a final destination outside the state;

(f) Property imported from outside the United States, held in a foreign trade zone or subzone, and then exported to a location outside Tennessee.

(4) A taxpayer must report the total acquisition costs of property as follows:

(a) For property that was new when the taxpayer purchased it, the taxpayer must report the total acquisition cost of the property as of the year the property was purchased.

(b) For property that was used when the taxpayer purchased it, the taxpayer must report the total acquisition cost of the property as of the year the property was new. However, if the taxpayer does not know or cannot reasonably determine the cost of the property when it was new or the year the property was new, the taxpayer may report the total acquisition cost of the used property as of the year the taxpayer acquired the property.

(c) For property previously reported as CIP tangible personal property, the taxpayer must report its total acquisition cost as of the year the property was placed in service, rather than the year of purchase, if those years differ.

(d) For all property, the total acquisition cost reported should include the full invoiced cost without deduction for the value of certain inducements, such as agreements and warranties, when these inducements are provided without additional charge.

(5) A capitalized expenditure made with respect to property after the initial acquisition must be reported in the year the expenditure was booked as a fixed asset. The costs of the capitalized expenditure should be reported as they are shown on the taxpayer’s financial accounting fixed asset records. Any expensed furniture, computer equipment, or other expensed items with a life of one year or longer should also be reported in the appropriate groups as assets. Expenses, costs, or amounts paid or incurred for incidental repairs and maintenance of property should not be reported.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-902.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988. Amendments filed February 21, 2017; effective May 22, 2017. Amendments filed May 12, 2020; effective August 10, 2020.

Tenn. Comp. R. & Regs. 0600-05-.05 AUDIT

(1) Desk audits shall be performed on all schedules returned. Items to be reviewed shall include:

(a) Depreciation;

(b) Math;

(d) Comparable accounts;

(e) Previous year’s assessment.

(2) Systematic field audits of individual accounts shall be performed as deemed necessary by the assessor of property. In addition, random field audits shall be performed periodically.

Nonreporting accounts, new accounts, major accounts, accounts with significant changes, and accounts suspected of improperly reporting may be emphasized. The purpose of the field audit shall be to determine if the taxpayer has reported properly or, if the taxpayer has not reported, to gather data for a forced assessment.

(3) Audits shall be conducted in accordance with a plan submitted by the assessor of property and approved by the State Board of Equalization.

(4) Assessors shall maintain confidentiality of taxpayer information in accordance with T.C.A. § 67-5-402.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-902.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988. Amendments filed February 21, 2017; effective May 22, 2017.

Tenn. Comp. R. & Regs. 0600-05-.06 STANDARD VALUATION

(1) In the absence of evidence to the contrary, the fair market value of commercial and industrial tangible personal property, except raw materials, supplies, and scrap property, shall be presumed to be either the total acquisition cost less straight line depreciation or the residual value, whichever is greater. The grouping of personal property and the depreciation allowed for each group shall be consistent with the schedule prescribed in Rule 0600-05-.11 below, and shall be based on a reasonable economic life for that group of items.

(2) The fair market value of raw materials and supplies shall be presumed to be their total acquisition cost as determined by the “first-in-first-out” (FIFO) method of accounting, in the absence of evidence to the contrary.

(3) The residual value of personal property shall be presumed to be twenty percent (20%) of total acquisition cost, in the absence of evidence to the contrary.

(4) The scrap value of personal property shall be presumed to be two percent (2%) of total acquisition cost, in the absence of evidence to the contrary.

(5) In making forced assessments on non-reporting accounts, the following factors shall be considered:

(a) Previous data on file for that account;

(b) Data from comparable accounts;

(6) Any tangible personal property which the taxpayer claims or will claim as CIP for federal income tax purposes based on the status of the property on the assessment date for property taxes may be reported by the taxpayer as CIP for property tax purposes. The value of CIP shall be presumed to be fifteen percent (15%) of all direct and indirect costs incurred and claimed by the taxpayer for federal income tax purposes as of the assessment date. The value of qualified pollution control equipment, whether or not reportable as CIP, shall be governed by T.C.A. § 67-5-604.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, 67-5-902, and 67-5-903.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988. Amendment filed May 31, 1991; effective July 15, 1991. Amendment filed August 17, 1994; effective October 31, 1994. Amendments filed February 21, 2017; effective May 22, 2017. Amendments filed February 21, 2017; effective May 22, 2017. Amendments filed May 12, 2020; effective August 10, 2020.

Tenn. Comp. R. & Regs. 0600-05-.07 NONSTANDARD VALUATION

(1) Notwithstanding the provisions of Rule 0600-05-.06, above, regarding standard valuation, the assessor shall place a value on the property different from the value indicated by the standard valuation provisions if there is sufficient evidence to warrant a different value and documentation of such evidence is included in the file. The assessor shall consider the level of trade at which the property is found and all other relevant and available evidence in determining a nonstandard value. Types of evidence that may support nonstandard value include: recent appraisals by appraisers holding professional designations in the valuation of personal property from recognized appraisal organizations and authoritative price or valuation guides for subject property.

(2) The assessor shall report in writing to the Division of Property Assessments all instances where a nonstandard value is placed on the property or requested by a taxpayer. The Division shall consider such reports in making recommendations to the State Board of Equalization regarding any needed revisions to these rules. The assessor may request the assistance of the Division of Property Assessments in determining a nonstandard value.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-902.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988. Amendments filed February 21, 2017; effective May 22, 2017.

Tenn. Comp. R. & Regs. 0600-05-.08 NOTIFICATION

(1) At least ten calendar days before the local board of equalization commences its annual session, the assessor shall notify the taxpayer of any change in the assessment or classification of the taxpayer’s personal property. Such notification of personal property assessment shall he sent to the taxpayer in the manner prescribed by law when:

(a) An assessment is made on a new business;

(b) A change is made in an assessment;

(2) A record of such notification shall be retained by the assessor for a period of not less than two years.

History

Authority: T.C.A. § 67-5-902.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988.

Tenn. Comp. R. & Regs. 0600-05-.09 MISCELLANEOUS

(1) In determining whether property should be assessed as real or personal, the following factors should be considered:

(a) The apparent movability or permanency of the item in its location or attachment to the land or structure. The cost of moving the item and the amount of damage that will be incurred to the item, the land, or the improvement if the item is removed should be weighed against the value of the item of property that is being considered. If the value of the item exceeds the moving cost and the amount of damage incurred, it is more likely to be considered personal property.

(b) The primary purpose which the item serves. This factor would most generally concern an item that forms a part, or segment, of a series of functions in a manufacturing and/or processing system. If the item is more or less special purpose in nature and its practical use would not enhance the total property if the present or a similar manufacturing processing system were not there, it is more likely to be considered personal property.

(c) The stated intent of the owner. This element will come into focus most frequently where leased premises are involved, although it must occasionally be considered where premises are owner-occupied. If the intent of the owner is to move the item upon relocation of the business, the item is more likely to be considered personal property, provided that such a move would be probable, practical, and cost-effective.

(2) In determining the proper taxable location, or situs, of personal property, the following factors are to be considered:

(a) Physical location;

(b) Permanency of the location;

(d) Domicile of the owner;

(e) Location as of January 1.

The physical location is of prime importance in determining the taxable situs of property that is rarely or infrequently moved. For property that changes location from time to time, the relative permanency of location in a particular place becomes important. If the property is moved with such frequency that it has no more or less permanent location, the home base of the property (such as where it is garaged, sent for repairs, or stored when not in use) is the most significant factor. If the home base cannot be defined, then the domicile of the owner becomes the primary factor. Although the location as of January 1 is a factor to be considered, often it is of nominal importance in determining situs.

History

Authority: T.C.A. § 67-5-902.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988.

Tenn. Comp. R. & Regs. 0600-05-.10 ENFORCEMENT

(1) Should it be determined by the Division of Property Assessments that a jurisdiction is not in compliance with these rules, the Division shall make a report of such noncompliance in writing to the State Board of Equalization for the appropriate action.

(2) In determining the degree of compliance with these rules, the Division of Property Assessments may review the records and procedures of the assessor and may perform any field audits of taxpayer returns deemed relevant to the review.

History

Authority: T.C.A. § 67-5-902.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988.

Tenn. Comp. R. & Regs. 0600-05-.11 REPORTING SCHEDULE

The following schedule or a facsimile shall be used by owners of commercial and industrial tangible personal property to report ownership of such property to the assessor pursuant to T.C.A. § 67-5-903. A substantially equivalent form may be used with prior approval of the director of the state Division of Property Assessments.

(This space intentionally left blank.)

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, 67-5-902, and 67-5-903.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988. Amendment filed May 31, 1991; effective July 15, 1991. Amendment filed August 17, 1994; effective October 31, 1994. Amendments filed February 21, 2017; effective May 22, 2017. Amendments filed May 12, 2020; effective August 10, 2020.

Tenn. Comp. R. & Regs. 0600-05-.12 EFFECTIVE DATE

These rules shall take effect on January 1, 1989.

History

Authority: T.C.A. §§ 4-3-5103 and 67-1-305.
Administrative History: Original rule filed August 29, 1988; effective October 13, 1988.

Chapter 0600-06 Agent Registration Program

Tenn. Comp. R. & Regs. 0600-06-.01 PURPOSE

The purpose of these rules is implementation of the provisions of T.C.A. §6751514 concerning registration and regulation of agents conducting assessment appeals for property tax purposes on behalf of others before the boards of equalization.

History

Authority: T.C.A. §§67-1-305 and 67-5-1514.
Administrative History: Original rule May 11, 1998; effective July 25, 1998.

Tenn. Comp. R. & Regs. 0600-06-.02 DEFINITIONS

(1) "Act" or "Agent registration act" means the law codified as T.C.A. §67515 14.

(2) "Board" means the Tennessee State Board of Equalization.

(3) "Panel" means the taxpayer agent regulatory panel created by the Act.

(4) "Rules" mean the rules promulgated in this chapter.

History

Authority: T.C.A. §§67-1-305 and 67-5-1514.
Administrative History: Original rule May 11, 1998; effective July 25, 1998.

Tenn. Comp. R. & Regs. 0600-06-.03 PROCESSING AND CONSIDERATION OF AGENT REGISTRATIONS

The following procedures shall apply to registration of taxpayer agents under T.C.A. §6751514:

(1) Applications. Applicants for registration shall submit an application on a form approved by the state board specifying whether they claim qualification by attainment of the program education and experience requirements, or by attainment of a recognized professional appraisal designation. Applications for renewal of registration shall be filed biannually on the approved form on or before June 30.

(2) Application fees. Applications for initial registration shall be accompanied by a registration fee in the amount provided by law. Applications for annual renewal of registration shall be accompanied by a renewal fee in the amount provided by law. Fees shall be paid by bank draft or money order in U.S. funds. Cash will not be accepted.

(3) Applications - accompanying information (a) Applicants by professional appraisal designation. Applicants for approval based on attainment of a professional appraisal designation shall include in their application, identification of the claimed designation, the designating organization, and any numbers or symbols used by the organization in identifying the applicant as a designee. The designation must be currently approved by the board and the applicant must maintain the designation throughout the renewal year for which application is made, which is the period beginning July 1 of the tax year for which the agency is exercised and extending until June 30 of the following year.

(b) Applicants by education and experience. Applicants for approval based on education and experience shall meet the following criteria:

Experience. Applicants shall identify the period of time for which experience is claimed, the companies for which the applicant was employed or the business names under which the applicant obtained relevant experience, the nature of work performed, samples of appraisal or assessment work, and the names of persons supervising the applicant's appraisal or assessment work or otherwise familiar with the applicant's appraisal or assessment work.

The applicant shall provide such additional evidence as may be reasonably required by the Board staff to verify experience consistent with the statutory standard.

Education. Applicants shall submit an official transcript from colleges or universities attended, identifying thereupon courses of instruction, credit hours, and course grades for which education credit is claimed. Where credit is claimed for courses from an approved assessment or appraisal organization, the applicant shall identify the course names and organizations, and provide with the application certificates of completion, pass/fail forms, grade report forms, or letters noting the applicant's successful completion of the courses. from the organizations which provided the courses. Upon request, the applicant shall provide such additional information as may reasonably be required to permit evaluation of courses against the statutory standard.
T.C.A. Exam. The applicant shall also present evidence of successful completion of the comprehensive examination required of candidates for the Tennessee Certified Assessor designation. Applicants may take the examination whether or not they meet other prerequisites for the T.C.A. designation, but the designation itself shall be awarded only upon attainment of all prerequisites otherwise provided.

(d) Denial of registration - disciplinary action. Registration or renewal of registration may be denied any applicant who fails to meet the statutory criteria or who fails as an applicant by designation to present evidence of a current recognized designation.

Registration shall be revoked if the registrant ceases to qualify under the approval criteria. Registration may be revoked or suspended, or a reprimand issued in the discretion of the board or panel, if the registrant commits any disciplinary offense specified in the registration law, or for violation of any standard of conduct approved by the board or panel. In determining whether to impose revocation or a lesser discipline, the board or panel will consider the willfulness of the offense, previous related offenses, and the extent of harm to the public or the appeals process.

Disciplinary action shall occur only after written notice to the registrant specifying the reasons and after an opportunity has been given to the registrant to be heard.

Disciplinary actions shall be appealable in the manner provided in the agent registration act.

History

Authority: TC.A. §§67-1-305 and 67-5-1514.
Administrative History: Original rule May 11, 1998; effective July 25, 1998. Amendments filed February 1, 2011; to have been effective May 2, 2011. On April 29, 2011, the Government Operations Committee filed a 15-day stay of the rules; new effective date May 17, 2011.

Tenn. Comp. R. & Regs. 0600-06-.04 MAINTENANCE OF REGISTRATION

(1) All registrants shall promptly report any change of address to the board.

(2) All registrants who are not residents of Tennessee must establish an agent for service of legal process with a resident of this state.

(3) All registrants shall notify service recipients of the fact of their registration with the board and the address of the board. This requirement may be met by inclusion of the following printed or stamped text on any contract or authorization for agent services involving property in Tennessee: "This agent is registered as a qualified property tax assessment appeals agent by the Tennessee State Board of Equalization (615/741-4883)".

(4) Client records shall be maintained for not less than three years following the date last action was taken or service performed on behalf of the client. Continuing education records shall be maintained for a period of at least three years.

History

Authority: T.C.A. §67-1-305 and 67-5-1514.
Administrative History: Original rule May 11, 1998; effective July 25, 1998.

Tenn. Comp. R. & Regs. 0600-06-.05 RECOGNITION OF PROFESSIONAL APPRAISAL DESIGNATIONS

(1) Form of requests. Requests for recognition of a professional appraisal designation must be submitted by the organization which bestows the designation through its authorized officers, directors, or employees. Requests shall contain the following information:

(a) Organization name, address of principal office and office where records are maintained, names of principal officers and administrative officials.

(b) Copy of current organization charter, by-laws, rules and other documents setting forth the purposes, structure, and governance of the organization.

(c) Name and description of professional appraisal designations for which recognition is sought, including detailed description of the standards which must be met for initial qualification or continuing designation.

(d) Description of organizational policies and procedures designed to ensure that only qualified persons receive designations.

(e) Such additional or supporting information as staff may reasonably require to complete review of the request.

(2) Notice of action. Review staff shall advise the organization if additional information is needed and shall advise the organization in writing whether the request is approved or denied.

Denials shall specify reasons for the action.

(3) Criteria for review. Recognition shall be granted upon a finding that (a) the organization exists in good faith for the purpose of promoting and improving appraisal and valuation: (b) the designation for which recognition is sought is a professional appraisal designation which is bestowed only upon persons who meet qualifications which match or exceed the education and experience requirements for agent qualification provided by law: and (c) the organization has and applies policies and procedures which insure that only persons who meet the qualifications in fact are allowed to obtain and retain the professional designation.

(4) Denial or revocation. Designations may be denied for cause and designations previously approved for recognition may be revoked upon finding that the organization no longer meets the criteria for approval set forth above. The organization shall be given written notice specifying reasons for the action, and may request the board to review the decision.

History

Authority: T.C.A. §§67-1-305 and 67-5-1514.
Administrative History: Original rule May 11, 1998; effective July 25, 1998.

Tenn. Comp. R. & Regs. 0600-06-.06 STANDARDS OF CONDUCT

Registrants shall certify that they have read and submit to the following standards of conduct:

(1) An agent shall not participate. whether individually or in concert with others, in any plan, scheme, or arrangement attempting or having as its purpose the evasion of any provision of the act or rules.

(2) An agent shall not directly or indirectly or in any manner whatsoever lend his/her registration or identification to any person, firm or corporation for the purpose of evading any provision of the act or rules.

(3) An agent shall exercise reasonable care and diligence to prevent persons under his/her supervision from engaging in conduct which would violate any provision of the act or rules.

(4) An agent shall not engage in any activity that constitutes dishonesty, fraud, gross incompetence or gross neglect of a client's affairs while acting as an agent.

(5) An agent shall promptly report to the board any known violation of the act or rules.

(6) An agent shall cooperate fully with the board, panel or staff in the investigation of an alleged violation of the act or rules.

(7) An agent shall not offer or promise anything of value with the intent of inducing a person who is performing a public duty to perform or fail to perform any act related to such public duty.

(8) An agent shall not contract for or accept compensation or anything of value for services not performed.

(9) An agent shall not knowingly or intentionally engage in any false or misleading conduct or advertising with respect to client solicitation.

(10) An agent shall not knowingly furnish inaccurate, deceitful, or misleading information to a client or employer, prospective client or employer or to a public agency or representative of a public agency.

(11) An agent shall not reveal information known to be confidential unless the release of such information is authorized by the source or required by law.

(12) An agent shall not state or imply that the registrant represents a person or firm that the registrant does not in fact represent.

(13) An agent shall not represent a client whose interests are in conflict with those of another client in the same proceeding.

(14) An agent shall not solicit or advertise his/her services as an agent by claiming a specific result or stating a conclusion regarding such services without prior analysis of the facts and circumstances pertaining thereto.

(15) An agent shall not assert or maintain a claim he/she knows or discovers to be false or without a reasonable foundation in law and fact.

(16) An agent shall not knowingly engage in ex parte communications as defined in the Uniform Administrative Procedures Act.

History

Authority: T.C.A. §§67-1-305 and 67-5-1514.
Administrative History: Original rule May 11, 1998; effective July 25, 1998.

Tenn. Comp. R. & Regs. 0600-06-.07 RECIPROCITY

An applicant may qualify by reciprocity in the manner permitted by Tenn.

Code Ann. §67-5-1514(k). Suspension or revocation of registration due to nonqualification shall be subject to appeal in the manner provided in §67-5-1514(f) and these rules.

History

Authority: 67-1-305 and 67-5-1514.
Administrative History: Original rule filed February 1, 2011; to have been effective May 2, 2011. On April 29, 2011, the Government Operations Committee filed a 15day stay of the rule; new effective date May 17, 2011.

Tenn. Comp. R. & Regs. 0600-06-.08 CONTINUING EDUCATION

As a prerequisite to renewal of an agent registration the agent shall present evidence satisfactory to the Board of having obtained, during the renewal period, education consisting of at least twenty (20) classroom hours of instruction approved by the Panel and the Board. Courses for which continuing education credit is recognized by the Tennessee Real Estate Appraiser Commission shall qualify for credit under this rule. Suspension or revocation of registration due to noncompliance with this rule shall be subject to appeal in the manner provided in §67-5-1514(f) and these rules.

History

Authority: T.C.A. §§67-1-305 and 67-5-1514.
Administrative History: Original rule filed February 1, 2011; to have been effective May 2. 2011. On April 29, 2011, the Government Operations Committee filed a 15-day stay of the rules; new effective date May 17, 2011.

Chapter 0600-07 Equalization of Commercial and Industrial Tangible Personal Property

Tenn. Comp. R. & Regs. 0600-07-.01 DEFINITIONS

The definitions adopted in Rule 0600-5-.01, concerning assessment of commercial and industrial tangible personal property, shall apply to this chapter as well.

History

Authority: T.C.A. §§67-1-305 and 67-5-1501.
Administrative History: Original rule filed July 7, 1989; effective August 21, 1989.

Tenn. Comp. R. & Regs. 0600-07-.02 STATEMENT OF PURPOSE

The following rules are intended to provide an orderly mechanism for adjustment of commercial and industrial tangible personal property assessments to the prevailing levels of property values for assessment purposes in each jurisdiction. Said adjustments shall be made in accordance with the terms provided herein without the necessity of an appeal by the owner or taxpayer, but nothing herein shall be construed to limit the availability of equalization to a taxpayer claiming such relief in a specific appeal.

History

Authority: T.C.A. §§67-1-305 and 67-5-1501.
Administrative History: Original rule filed July 7, 1989; effective August 21, 1989.

Tenn. Comp. R. & Regs. 0600-07-.03 NOTICE OF PROPOSED EQUALIZATION

On or before June 1, staff will prepare and send notice of the proposed equalization to affected jurisdictions and publish a "sunshine" notice of the meeting at which equalization will be considered. In addition, staff will provide for newspaper notice in affected jurisdictions to the extent required by T.C.A. §67-5-1509(c).

History

Authority: T.C.A. §§67-1-305 and 67-5-1501.
Administrative History: Original rule filed July 7, 1989; effective August 21, 1989.

Tenn. Comp. R. & Regs. 0600-07-.04 RECORD OF FORCED ASSESSMENTS

Assessors of property shall maintain a list of commercial and industrial tangible personal property accounts for which no reporting schedule has been filed, or the assessment records for such accounts shall contain a notation such that the absence of a reporting schedule as to particular accounts can be readily made known to tax collecting officials or others responsible for issuance of property tax bills upon request.

History

Authority: T.C.A. §§67-1-305 and 67-5-1501.
Administrative History: Original rule filed July 7, 1989; effective August 21, 1989.

Tenn. Comp. R. & Regs. 0600-07-.05 ORDER OF EQUALIZATION

(1) On or before July 1, the State Board of Equalization will meet and consider a resolution and order to local property tax collecting officials and to other officials involved in the preparation of property tax bills, directing that assessments of commercial and industrial tangible personal property be equalized on the basis of the appraisal ratio established for the jurisdiction in which such property is located, such equalization to be reflected in the property tax bill sent to the taxpayer.

(2) The resolution and order shall reflect that equalization of any particular property assessment shall be conditioned upon the taxpayer having filed the reporting schedule required by law, and the -- 1 of 2 -equalization shall be applied to the assessment as finally accepted or determined by the assessor or the local or state boards of equalization.

(3) Copies of the approved resolution and order shall be furnished to each property tax collecting official and to other officials responsible for issuance of property tax bills.

(4) Property tax bills which are based in whole or part on an assessment of commercial and industrial tangible personal property shall include information showing the specific equalization factor applied to the personal property assessment.

History

Authority: T.C.A. §§67-1-305 and 67-5-1501.
Administrative History: Original rule filed July 7, 1989; effective August 21, 1989.

Tenn. Comp. R. & Regs. 0600-07-.06 EFFECTIVE DATE

The equalization provided herein shall be accomplished in all counties for tax year 1991 and later years.

History

Authority: T.C.A. §§4 3 5103, 67 1 305, 67 5 1501 and 67 5 1509.
Administrative History: Original rule filed July 7, 1989; effective August 21, 1989. Amendment filed May 30, 1991; effective July 14, 1991. -- 2 of 2 --

Chapter 0600-08 Property Tax Exemptions

Tenn. Comp. R. & Regs. 0600-08-.01 APPLICATION FORM AND FEES

(1) Persons applying for property tax exemption shall apply on a form approved by the Board and pay a fee to defray the expense of processing the application, as provided in this rule.

The fee shall be proportionate to the value of the property as estimated by staff based on available information. The fee shall be thirty dollars ($30) for property valued at less than $100,000, forty-two dollars ($42) for property valued from $100,000 to less than $250,000, sixty dollars ($60) for property valued from $250,000 to less than $400,000, and one hundred twenty dollars ($120) for property valued at $400,000 or more. The fee shall be due upon the filing of the application.

(2) If the Board determines that the cost associated with processing exemption applications in a given year was less than the amount of fees paid, the excess of fees paid over cost shall be refunded ratably to each payor during the year.

(3) Notwithstanding the value of the property which is the subject of an application, the minimum fee only shall be due when application is made for exemption of property that is exempt at the time of transfer and is being transferred between affiliated institutions with no change in use.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-212(b).
Administrative History: Original rule filed April 30, 2004; effective July 14, 2004. Amendment filed February 1, 2011; to have been effective May 2, 2011. On April 29, 2011, the Government Operations Committee filed a 15 day stay of the rule; new effective date May 17, 2011. Amendment filed December 12, 2012; effective March 12, 2013.

Tenn. Comp. R. & Regs. 0600-08-.02 CRITERIA FOR EXEMPTION OF LAND

(1) The purpose of this rule is to establish criteria for determining eligibility of land for religious, charitable, educational or scientific exemption from property taxes.

(2) Land must be in actual use for exempt purposes of the exempt institution before it may qualify for exemption. Land will be presumed to be in use if:

(a) It is land underlying exempt structures or paving;

(b) If the total land area claimed for exemption, including that which is underlying exempt structures, is five acres or less; or (c) If the land exceeds the foregoing measures but is nevertheless necessary to meet government health, planning, or other requirements for configuration or minimum area prior to granting of any variance. In the absence of locally adopted zoning standards, resort may be had to requirements imposed for similar structures in nearby communities that impose zoning requirements or to zoning requirements recommended by a model generally accepted or used in this state. For purpose of this presumption the minimum area thus determined will be multiplied by a factor of 1.5.

(3) The presumption in this rule is rebuttable. The assessor or taxing jurisdiction may rebut the presumption by proving that vacant land otherwise within the presumption is not being used for exempt purposes or is being offered for sale as a tract separate from the remaining land in use. The applicant for exemption may rebut the presumption by proving that vacant land which would be denied exemption under the presumption, is in fact being regularly used for exempt purposes qualifying for exemption in accordance with law.

(4) Land held solely for future construction or other future uses does not qualify for exemption.

Land that is held solely or primarily for its preservation, conservation, protection, or its scientific or ecological significance will not be eligible for exemption under T.C.A. § 67-5-212 unless and to the extent there is a clear showing of active research or other active exempt use taking place on the subject property.

(5) Land held by a religious institution solely or primarily for solitary or individual reflection, prayer, or meditation will not be eligible for exemption under T.C.A. § 67-5-212 unless and to the extent there is a clear showing of active and persistent use by the organization, its members, congregants, or other persons authorized to use the property.

(6) As used in T.C.A. § 67-5-212, parsonage means a residence owned by a religious institution where a full-time regular minister resides.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-212.
Administrative History: Original rule filed April 30, 2004; effective July 14, 2004. Amendments filed May 12, 2020; effective August 10, 2020.

Tenn. Comp. R. & Regs. 0600-08-.03 CRITERIA FOR EXEMPTION OF MEDICAL CLINICS

(1) As used in this rule “clinic” means a facility other than a hospital or other licensed health care facility that provides primary medical care.

(2) As used in this rule “primary medical care” means health care services that cover a range of disease prevention and general wellness services, including diagnosis and treatment of common conditions, patient counseling, and the management of a patient’s overall care.

(3) A clinic owned by a charitable institution will be approved for exemption if it meets the following criteria:

(a) The clinic is located in a medically underserved area or serves a medically underserved population as designated by the U.S. Department of Health and Human Services or the State of Tennessee;

(b) The clinic provides services without regard to ability to pay and, if it submits claims to any third party payer, it does not decline TennCare, Medicare, or the uninsured;

(c) The clinic either does not charge for services to any patient, or if it charges for services, charges are based on a sliding-fee scale that is based on patients' family size and income, and (d) No physician or other employee of the clinic is compensated in amounts in excess of what is reasonable for services performed for the clinic and comparable to other qualified and experienced providers.

History

Authority: T.C.A. §§ 67-1-305, 67-5-212, and 67-5-212(b).
Administrative History: Original rule filed April 30, 2004; effective July 14, 2004. Amendment filed June 25, 2008; effective September 8, 2008. Amendments filed May 12, 2020; effective August 10, 2020.

Chapter 0600-09 Property Tax Freeze Program

Tenn. Comp. R. & Regs. 0600-09-.01 PURPOSE

The purpose of these rules is implementation of the provisions of Public Chapter 581, Acts of 2007 which enacted the Property Tax Freeze Act. The Act allows the legislative body of any county or municipality to adopt a property tax freeze program under the provisions of the Act.

The Act provided for the State Board of Equalization, through the Division of Property Assessments, to establish rules and regulations to provide uniform definitions, application forms, income verification procedures and other necessary or desirable rules, regulations, policies and procedures for the implementation of the Property Tax Freeze Program.

History

Authority: Public Act 581, Acts of 2007, T.C.A. §§67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Tenn. Comp. R. & Regs. 0600-09-.02 DEFINITIONS

For purposes of the tax freeze rules and regulations:

(1) “Act” or “Tax Freeze Act” means the law codified as Tenn. Code Ann. § 67-5-705.

(2) “Affidavit” is hereby defined as a notarized statement under oath which specifies all pertinent data and contains the valid signature of all parties thereto.

(3) “Base Assessment” means the assessment as determined by the assessor of property used to determine the base tax.

(4) “Base Tax” as defined by Tenn. Code Ann. § 67-5-705(c)(1)

(5) “Collecting official” as defined by Tenn. Code Ann. § 67-5-705(c)(2).

(6) “Division” or “Division of Property Assessments” shall mean the Division of Property Assessments in the Office of the Comptroller of the Treasury created by Tenn. Code Ann. § 67-1-201.

(7) “Improvement” as defined by Tenn. Code Ann. § 67-5-705(c)(3).

(8) “Owner” means a person that has a present possessory interest in the property fee or life estate, but for the purposes of the income requirement, “owner” includes persons of any interest in the property, including holders of remainder interest, who use the property as their principal residence at any time during the year .

(9) “Principal residence” as defined by Tenn. Code Ann. § 67-5-705(c)(4). Principal residence shall be determined and limited as provided for in Rule 0600-9-.04.

(10) “Tax year” means the period of January 1 through December 31 of the year in which property taxes become due.

(11) “Taxpayer” is hereby defined to be the applicant, except for determination of income.

History

Authority: Public Chapter 581, Acts of 2007, T.C.A. §67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Tenn. Comp. R. & Regs. 0600-09-.03 . ADOPTION AND TERMINATION OF PROGRAM BY LOCAL GOVERNMENT

(1) Adoption of Tax Freeze Program. The legislative body of any county or municipality adopting the property tax freeze program provided in Tenn. Code Ann. § 67-5-705 must do so by either resolution or ordinance. Upon adoption of such a resolution or ordinance, the clerk of the legislative body shall file a copy of the resolution or ordinance with the Division of Property Assessments within 45 days of adoption.

(2) Termination of Tax Freeze Program. The legislative body of any county or municipality which has adopted the property tax freeze program provided in Tenn.

Code Ann. § 67-5-705 may terminate the program by adopting a resolution or ordinance terminating the program. The clerk of the legislative body must file a copy of the resolution or ordinance terminating the program with the Division of Property Assessments within 45 days of adoption. The collecting official shall remove all taxpayers under the tax freeze program for the tax year subsequent to the year in which the resolution or ordinance terminating the program is adopted.

History

Authority: Public Chapter 581, Acts of 2007, T.C.A. §67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Tenn. Comp. R. & Regs. 0600-09-.04 PRINCIPAL RESIDENCE CONSIDERATIONS

(1) Maximum Land Size. The land subject to the tax freeze shall be limited to the portion of land used to support residential structures but no less than the minimum residential lot size required by applicable zoning. In no event may the land portion subject to the tax freeze exceed five (5) acres. For property not used exclusively for residential purposes, including farm, agriculture, forest or open space, only the portion of the land used to support the residential structures, such as that designated as the home site or improvement site on the assessment records, shall be eligible for the tax freeze; however, such land shall not exceed five (5) acres.

(2) Principal Residence. Collecting officials shall determine a taxpayer’s principal residence in accordance with the principles set forth by Tenn. Code Ann. § 2-2-122.

The tax freeze is limited to one qualifying property constituting the principal residence of the taxpayer. The taxpayer shall sign a statement that the property for which the tax freeze is sought is the taxpayer’s principal residence for voting purposes and that the taxpayer has not submitted another property as the taxpayer’s principal residence for any purpose in the jurisdiction, the State of Tennessee or any other state.

History

Authority: Public Chapter 581, Acts of 2007, T.C.A. §67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Tenn. Comp. R. & Regs. 0600-09-.05 AGE REQUIREMENT AND VERIFICATION

(1) A taxpayer, in order to satisfy the property tax freeze minimum age requirement, must attain age sixty-five (65) on or before December 31 of the tax year for which the property tax freeze is requested.

(2) Acceptable evidences are:

(a) copy of birth certificate, (b) copy of driver license, (c) copy of Medicare card, (d) copy of marriage certificate which states the taxpayer's age, (e) copy of passport, (f) copy of military id, (g) copy of valid census record, or (h) other evidence submitted and approved by the collecting official that offers reasonable proof of age of the applicant.

(3) Qualification under the state tax relief program provided for in Tenn. Code. Ann. § 67- 5-702 shall be acceptable evidence of age.

History

Authority: Public Chapter 581, Acts of 2007, T.C.A. §67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Tenn. Comp. R. & Regs. 0600-09-.06 INCOME REQUIREMENT

(3) Annual income from all sources shall include, but is not limited to, social security payments after the medicare deduction, social security disability, supplemental security income, retirement and pension benefits after deduction of healthcare insurance premiums, veteran's benefits, worker's compensation, unemployment compensation, salaries and wages, alimony, total interest and total dividends. For income from a business, farm, rental property, estate settlement, sale of securities, or other comparable source, include only the net income or loss after expenses.

Documentation of the loss must be provided with the application. Gain or loss from the sale of a principal residence, AFDC, child support, food stamps, and VA aid and attendance shall not be considered income. Except as otherwise provided by statute or these rules, determinations regarding the income of an applicant or owners of property shall be guided by the federal income tax requirements for determining income. When determining the income using a tax return, the adjusted gross income amount is used. This amount is added to any income sources specified above which may not be taxable by IRS standards.

(4) Social Security, railroad retirement benefits, and Veterans Administration benefits that are required to be paid to a nursing home for the care of the taxpayer, or coowner(s), shall not be considered as income. Documentation completed by the nursing home administrator or person handling the taxpayer’s business must be provided.

History

Authority: Public Chapter 581, Acts of 2007, T.C.A. §67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Tenn. Comp. R. & Regs. 0600-09-.07 INCOME VERIFICATION

(1) Evidence of income is required and must accompany the application. Acceptable evidence of income shall be the following for applications:

(a) A copy of the taxpayer’s federal income tax return for the year in which the qualifying income must be determined, (b) An affidavit or a certified statement from the taxpayer given under penalty of perjury, that the taxpayer was not required to file a federal income tax return, or (c) Qualification under the state tax relief program provided for in Tenn. Code.

Ann. § 67-5-702.

(2) Evidence of income may also include other evidence submitted and approved or required by the collecting official such as bank statements or interest earned statements.

(3) The collecting official may require the taxpayer to sign any income verification authorization statement or form required by the division, Social Security Administration or the Internal Revenue Service.

History

Authority: Public Chapter 581, Acts of 2007, T.C.A. §67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Tenn. Comp. R. & Regs. 0600-09-.08 VERIFICATION OF OWNERSHIP AND RESIDENCY

(1) Evidence of ownership and residency is required and must accompany the application. Acceptable evidence of ownership shall include, but not be limited to, a copy of the current year tax notice or receipt for each jurisdiction for which the tax freeze is requested. Acceptable evidence of residency shall include, but not be limited to, a copy of the taxpayer’s voter registration card, if available. The collecting official may consider other evidence submitted by the taxpayer that offers reasonable proof of ownership and residency.

(2) For a new application, before completing the certification, the collecting official must establish that the taxpayer is an owner as shown on the current year tax notice or receipt and the type of ownership interest; or if the taxpayer's name does not appear on the tax notice or receipt, the qualifications of the individual to apply for the tax freeze and the type of ownership must be evidenced. In the event the deed cannot be located, the taxpayer must submit an affidavit explaining the circumstances under which the applicant became the owner of the property.

(3) The taxpayer must establish ownership by evidence submitted no later than the deadline for filing the application or reapplication established under Rule 0600-9-.09.

(4) Other considerations of ownership verification are as follows:

(a) Life Estate. A holder of a life estate may be eligible for the tax freeze program.

If the life estate is not shown on the tax notice/receipt, acceptable evidence must be provided. Acceptable evidence will be a recorded property deed, probated will or other legal instrument conveying the life estate.

(b) Mobile Home Owner. An eligible taxpayer owning and whose principal residence is a mobile home may qualify for the tax freeze program if the following is provided in addition to the taxpayer’s application.

A title or bill of sale (if a title or bill of sale is not available, an affidavit of purchase or inheritance may be provided.);
In the event the taxpayer does not own the land, information from the assessor showing the assessment value of the mobile home; and 3. A copy of the tax receipt.

(c) If an eligible property tax freeze taxpayer is relocated due to illness or disability, the property tax freeze may continue if the recipient intends to return to the home when recovered sufficiently. In determining whether the recipient intends to return to the home, rental of the home does not of itself evidence an intent not to return. If the rental is month-to-month or otherwise short-term consistent with the expected absence, the recipient may nevertheless be deemed to have an intent to return to the home.

History

Authority: Public Chapter 581, Acts of 2007, T.C.A. §67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Tenn. Comp. R. & Regs. 0600-09-.09 APPLICATION PROCESS AND DEADLINES

(1) The taxpayer must apply within thirty-five (35) days from the date taxes in the jurisdiction of the collecting official become delinquent for the tax year for which the freeze is sought to establish an initial base tax. A taxpayer who has established an initial base tax must reapply and re-qualify within thirty-five (35) days from the date taxes in the jurisdiction of the collecting official become delinquent for the year preceding the tax year for which the freeze is sought. Provided, however, that if the county trustee acts as the agent for receiving and approving applications on behalf of the municipality, the delinquency date for the county taxes shall be used in determining the deadline for the municipal application or reapplication. A taxpayer who fails to reapply or re-qualify within the time established forfeits eligibility for the program.

(2) For a new application, before completing the certification, the collecting official must establish through application the following:

(a) That the taxpayer is an owner and ownership has been established pursuant to

Rule 0600-9-.08.

(b) That the taxpayer is 65 years or older or will be 65 years or older by the end of the year for which the tax freeze is sought.

(d) That the taxpayer’s income does not exceed the maximum income level for the jurisdiction as determined by the Comptroller of the Treasury.

(e) That the taxpayer was told to report the income of all owners.

(f) That the authority to sign for the owner was established if someone other than the property owner applied or signed the application and a copy of the documentation of authority was provided.

(3) For a reapplication, before completing the certification, the collecting official must establish through ownership, income, and residency information that the taxpayer reported information consistent with that of prior years and there is no reason to believe the taxpayer misunderstood the instructions.

(4) A municipality may authorize and appoint the county trustee to act as its agent for receiving applications and determining eligibility for its tax freeze program. Such agency shall be subject to the county trustee agreeing to act as such agent in writing.

Such authorization shall be established through the resolution or ordinance provided for under Rule 0600-9-.03 or a subsequent resolution or ordinance. If such agency is authorized, the county trustee may rely on one application from the taxpayer in determining the qualifications and eligibility of the taxpayer for both county and municipality purposes.

(5) The Division shall develop and furnish forms for the application and reapplication process. A substantially equivalent form may be used, provided that such form is approved by the Division. The Division may make such application and reapplication process available electronically.

History

Authority: Public Chapter 581, Acts of 2007, T.C.A. §67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Tenn. Comp. R. & Regs. 0600-09-.10 BASE TAX AMOUNT DETERMINATION

(1) The collecting official shall furnish each applicant’s name, property address and parcel identification to the assessor of property on or before the fifteenth (15) day after the deadline date for filing the application or reapplication. Within sixty (60) days after the deadline date the assessor shall certify the base assessment for each applicant. Nothing herein shall prevent the collecting official and assessor from exchanging information prior to these deadlines.

(2) The tax rate for the year for which the base assessment is determined shall be applied to the base assessment to determine the base tax.

(3) The base tax shall be adjusted when an improvement is made to the structures or land designated a part of the property in determining the base assessment. Such adjustment shall be determined by the assessor of property in accordance with procedures developed by the Division.

(4) The base tax or adjusted base tax shall be used on the tax roll.

(5) The base assessment and base tax shall be redetermined when the property is transferred to a new qualifying owner and shall be subject to the application of the new owner. The base assessment and base tax of the new owner shall be determined as of the tax year for which the new owner establishes eligibility.

History

Authority: Public Chapter 581, Acts of 2007, T.C.A. §67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Tenn. Comp. R. & Regs. 0600-09-.11 REMOVAL FROM PROGRAM

Taxpayers that fail to continue to qualify for the tax freeze shall be removed from the program.

Upon removal from the program, taxes shall be determined using the current assessment and tax rate for the property.

History

Authority: Public Chapter 581, Acts of 2007, T.C.A. §67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Tenn. Comp. R. & Regs. 0600-09-.12 RECORDS AND REPORTING TO STATE

(1) All documents and records of the tax freeze program shall be maintained by the collecting official for a period of five (5) years from the deadline date for the application or reapplication.

(2) Collecting officials may store the application and any documentation submitted for purposes of verification of income, age, residency, ownership, or other documentation necessary to qualify for the tax freeze in an electronic format and storage medium (3) Pursuant to Tenn. Code Ann. § 67-5-705(g)(2) the financial records obtained by the collecting official shall be considered confidential but shall be available to local or state officials who administer or enforce the provisions of the tax freeze program.

(4) The collecting official shall furnish the following information to the Division on or before December 15 of each year:

(a) the total number of taxpayers on the tax freeze program by jurisdiction, (b) the aggregate amount of actual taxes subject to the tax freeze, (c) the aggregate amount of the frozen taxes; and (d) other such information required by the Division.

History

Authority: Public Chapter 581, Acts of 2007, T.C.A. §67-5-705.
Administrative History: Original rule filed November 13, 2007; effective January 27, 2008.

Chapter 0600-10 Subsidized Affordable Housing

Tenn. Comp. R. & Regs. 0600-10-.01 PURPOSE

The purpose of these rules is to define the value of subsidized affordable housing for property taxes in a manner that is certain and predictable, that furthers the federal incentives to assure a reasonable affordable housing supply, and that comports with state constitutional standards for ad valorem taxation.

History

Authority: T.C.A. §§ 4-3-5103 and 67-1-305.
Administrative History: Original rule filed April 21, 2016; effective July 20, 2016.

Tenn. Comp. R. & Regs. 0600-10-.02 DEFINITIONS

As used in these rules, unless the context otherwise requires:

(1) “Low-income housing tax credit (LIHTC) property” means low-income housing property restricted under government regulations pursuant to § 42 of the Internal Revenue Code of 1986, codified in 26 U.S.C. § 42, the low-income housing tax credit program;

(2) “Rural rental housing property” means property financed or refinanced by a loan made, insured, or guaranteed by a branch, department, or agency of the United States government under § 515 of the Housing Act of 1949, codified in 42 U.S.C. § 1485, the rural rental housing program;

(3) “Section 1602 affordable housing” means low-income housing property restricted under government regulations pursuant to § 42 of the Internal Revenue Code of 1986, codified in 26 U.S.C. § 42, but for which credits have been surrendered in return for a loan, as authorized by § 1602 of the American Reinvestment and Recovery Act of 2009;

(4) “Subsidized affordable housing” means property participating in federal programs to incentivize private housing investment in return for rent concessions to needy tenants. These programs include, but are not limited to, those authorized under the § 515 Rural Rental Housing program, § 42 of the Internal Revenue Code of 1986, or § 1602 of the American Reinvestment and Recovery Act of 2009; and (5) “Taxpayer” means any owner of property subject to taxation or any party liable for property taxes.

History

Authority: T.C.A. §§ 4-3-5103 and 67-1-305.
Administrative History: Original rule filed April 21, 2016; effective July 20, 2016. July, 2016

Tenn. Comp. R. & Regs. 0600-10-.03 DETERMINING VALUE FOR LIHTC PROPERTY

(1) The taxable value of LIHTC property shall consist of a restricted use component and a component representing the economic benefit of the subsidy to the property owners.

(2) The restricted use component shall be the income approach value resulting from using actual rents paid or payable by needy tenants and by such factors for vacancy, collection loss, expenses, reserves, and capitalization rates as are typically experienced by comparable properties in the area in which the property is located or economically comparable areas.

(3) With regard to the value of the subsidy component, a taxpayer of low-income housing tax credit property shall elect to either:

(a) Have the assessor include in the assessor’s annual appraisal the present value of all future tax credits for each of the unused tax credit years remaining on the property; or (b) Have the assessor include in the assessor’s annual appraisal, instead of the present value of all future tax credits, the average annual present value of the credit as calculated in (3)(a) above, based on the Compliance Period provided for in the Land Use Restriction Agreement for the particular property being valued.

History

Authority: T.C.A. §§ 4-3-5103 and 67-1-305.
Administrative History: Original rule filed April 21, 2016; effective July 20, 2016.

Tenn. Comp. R. & Regs. 0600-10-.04 DETERMINING VALUE FOR SECTION 515 RURAL RENTAL HOUSING PROPERTY

(1) The taxable value of rural rental housing property shall be calculated by the income approach value resulting from using actual rents paid or payable by needy tenants plus the loan subsidy income attributed to the property for the year at issue. Additional income approach factors for vacancy, collection loss, expenses, reserves, and capitalization rates shall be based on those typically experienced by comparable properties in the area in which the property is located or economically comparable areas.

(2) The loan subsidy income attributed to the property shall be the difference between actual loan amortization and a typical market loan amortization for the year at issue.

History

Authority: T.C.A. §§ 4-3-5103 and 67-1-305.
Administrative History: Original rule filed April 21, 2016; effective July 20, 2016.

Tenn. Comp. R. & Regs. 0600-10-.05 DETERMINING VALUE FOR SECTION 1602 AFFORDABLE HOUSING

(1) The taxable value of § 1602 affordable housing property shall be calculated by the income approach value resulting from using actual rents paid or payable by needy tenants plus the forgivable loan income attributed to the property for the year at issue. Additional income approach factors for vacancy, collection loss, expenses, reserves, and capitalization rates shall be based on those typically experienced by comparable properties in the area in which the property is located or economically comparable areas.

(2) The forgivable loan income attributed to the property shall be the amount of loan principal forgiven for the year at issue.

History

Authority: T.C.A. §§ 4-3-5103 and 67-1-305.
Administrative History: Original rule filed April 21, 2016; effective July 20, 2016. July, 2016

Tenn. Comp. R. & Regs. 0600-10-.06 IMPLEMENTATION

(1) The assessor shall implement the value methods required by these rules as of January 1. For each LIHTC property, the taxpayer shall notify the assessor of the taxpayer's election pursuant to rule 0600-10-.03(3) and provide documentation necessary to permit the assessor to apply the method elected. If a taxpayer for a LIHTC property fails to notify the assessor of the taxpayer’s election hereunder, the assessor shall choose one of the valuation methods provided in rule 0600-10-.03(3) and apply that method for each year until the particular property’s subsidy is exhausted. The assessor shall update the subsidy component of a LIHTC property assessment as appropriate to the alternate method as provided in these rules. The assessor shall update the restricted-use component of a LIHTC property assessment on the occasion of any county-wide reappraisal, or upon being directed by the county or state board of equalization to update the valuation for a year in which the assessment is properly appealed.

(2) The taxpayer shall be bound by the method it elected under rule 0600-10-.03(3) for each year until the subsidy is exhausted. Existing properties in operation on the effective date of these rules shall be valued by the method elected by the taxpayer under rule 0600-10-.03(3) for the remaining period of the subsidy.

History

Authority: T.C.A. §§ 4-3-5103 and 67-1-305.
Administrative History: Original rule filed April 21, 2016; effective July 20, 2016.

Tenn. Comp. R. & Regs. 0600-10-.07 EFFECTIVE DATE

After this chapter takes effect, these rules shall apply to the tax period beginning January 1, 2016 and all subsequent tax periods.

History

Authority: T.C.A. §§ 4-3-5103 and 67-1-305.
Administrative History: Original rule filed April 21, 2016; effective July 20, 2016.

Chapter 0600-11 Appraisal of Parcels with Mineral Reserves

Tenn. Comp. R. & Regs. 0600-11-.01 PURPOSE

The purpose of these rules is to outline policies and procedures for the appraisal of mineral interests subject to property taxation. These rules replace the Mineral Appraisal Section of the State of Tennessee Assessment Manual approved by the State Board of Equalization in 1972.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-502(d).
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.02 APPLICABILITY

These rules apply to parcels of real property classified as having either (1) active mineral reserves; (2) depleted mineral reserves; (3) inactive measured mineral reserves; or (4) inactive indicated mineral reserves. These rules do not apply to severed mineral rights or parcels classified as having minerals not subject to appraisal.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-601(d).
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.03 DEFINITIONS

As used in these rules, unless the context otherwise requires:

(1) “Active mineral reserves” mean those properties where actual production of the minerals being valued has occurred within one (1) year prior to the assessment date.

(2) “Assessment date” is defined in T.C.A. § 67-5-504(a).

(3) “Depleted mineral reserves” mean those properties with mineral reserves that have been determined to be depleted by prior extracting operations and that are not mineable and merchantable by current technology.

(4) “Farm property” is defined as in T.C.A. § 67-5-501(3).

(5) “Growing crops” is defined as in T.C.A. § 67-5-216(a).

July, 2017 (6) “Inactive measured mineral reserves” mean those properties that contain presently extractable and merchantable minerals that are not currently being extracted. Reliable evidence must indicate that the minerals could be extracted or used in the manufacture of other products by judicious methods under present economic, technical and legal conditions.

(7) “Inactive indicated mineral reserves” mean those properties on which no mining, drilling or other reliable evidence establishes the presence of the minerals in quantities or quality suitable for immediate economic development, but reliable geological data supports the assumption of mineral reserves with potential contributory value.

(8) “Industrial and commercial property” is defined as in T.C.A. § 67-5-501(4).

(9) “Mineral” means any substance with economic value, whether organic or inorganic, which can be extracted from the earth, including industrial minerals but excluding products of the soil.

The term mineral includes, but is not limited to, barite, bauxite, clay, coal, copper, dolomite, dimension stone, feldspar, fluorspar, gold, iron, lead, manganese, marble, natural gas, oil, perlite, phosphate, pyrites, sandstone, shale, silica, silver, strontium, tin, titanium, zinc, and zirconium. The term mineral does not include growing crops.

(10) “Minerals not subject to appraisal” mean limestone, sand and gravel in accordance with T.C.A. § 67-5-601(d).

(11) “Operator” means any person responsible for the day-to-day operation of a mine or oil and gas well by reason of contract, lease or operating agreement or any person owning an unleased producing mine or well operated by the owner thereof.

(12) “Subclass,” “subclassified,” and “subclassification” mean the classification of real property as public utility property, industrial and commercial property, residential property or farm property as defined in T.C.A. § 67-5-501 and in accordance with T.C.A. § 67-5-801(a).

(13) “Unit” means the total area incorporated in a unitization agreement providing for a consolidated development and operational plan to recover oil and/or gas from the areas incorporated within the unit.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-601(d).
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.04 CLASSIFYING PARCELS WITH MINERAL RESERVES

(1) Properties identified as having mineral reserves shall be classified into one of the following categories:

(a) Active Mineral Reserves;

(b) Depleted Mineral Reserves;

(d) Inactive indicated mineral reserves; or (e) Minerals not subject to appraisal.

(2) Factors to be considered in evaluating mineral reserves include inherent mining and drilling hazards, regulatory restrictions, and market conditions.

July, 2017

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-601(d).
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.05 DISCOVERY

(1) The primary source for discovering parcels with mineral reserves is the mineral interest statement/declaration mineral owners must file with the Assessor in the county in which the interest is located in accordance with T.C.A. § 67-5-804(b).

(2) The following additional sources are recommended for use whenever possible:

(a) Permit applications filed with the Tennessee Department of Environment and Conservation;

(b) Permit applications filed with the federal Office of Surface Mining;

(d) Business license records maintained by county clerks;

(e) On-site inspections; and (f) Discussions with owners and producers.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-804.
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.06 VALUATION AND SUBCLASSIFICATION OF ACTIVE MINERAL RESERVES

GENERALLY.

(1) In most cases, the income approach constitutes the most appropriate method to value mineral reserves due to the inapplicability of the cost approach and the lack of sufficient market data to process a reliable sales comparison approach. In situations where sufficient market data exists, the Assessor should prepare both an income and sales comparison approach and correlate the indications of value in the same manner as when appraising nonmineral properties.

(2) Typically, the discounted cash flow analysis (“DCF”) will be the preferred method when processing an income approach. Special considerations exist when using a DCF, or any other income approach technique, to value mineral reserves. Unlike other types of incomeproducing properties, minerals are a depleting asset. Additionally, the discount rate used to capitalize net income into an estimate of value may be higher than the discount rate used in other situations due to the higher degree of risk inherent in extracting minerals. Moreover, the reversionary value of a parcel with mineral reserves may be minimal or nonexistent due to the fact that the minerals have been depleted and only wasteland may remain, requiring additional costs for reclamation. Finally, the investor’s income stream is dependent upon factors that cannot be controlled as easily as in other settings.

(3) The DCF measures the present worth of the right to receive a series of cash payments over a given period of time (economic life). The basic elements normally required for this type of appraisal method are the determination of: 1) net annual income based on production history, economic royalty rates and consideration of allowable expenses; (2) remaining economic life of the reserves; and (3) the rate at which the income is discounted to present worth (the discount rate). The projected net annual income is discounted over the remaining economic life to yield an estimate of the present net worth of the active reserve.

July, 2017 (4) In most cases, the land and buildings in the area permitted for the mining or drilling operations will be subclassified as industrial and commercial property. The remaining portion of the tract will typically be subclassified as farm property unless it is being used for another purpose. In that event, the use of the property will determine the proper subclassification.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-801.
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.07 VALUATION OF ACTIVE MINERAL RESERVES – COAL

(1) The Assessor shall value coal reserves by compiling the information necessary to complete the spreadsheet or a facsimile in Appendix A.

(2) In order to complete the spreadsheet in Appendix A, the Assessor shall utilize the following procedure to the extent practicable:

(a) Contact the Office of Surface Mining (“O.S.M”), or other appropriate entity, to obtain the coal production for the permitted area for prior years;

(b) Contact the O.S.M., or other appropriate entity, for information concerning: new permits, the Inspectable Units List, current coal producers, permit information, renewed permit list, pending permits, successor list, and listings in the Applicant/Violator System;

(d) Estimate a discount rate and management allowance utilizing the best available market data;

(e) Estimate the economic life of the mine after consideration of the issue date of the permit, the year production began, the total production over the life of the permit and the anticipated production of the life of the mine; and (f) Reduce the indicated value by the appraisal ratio for the tax year and jurisdiction under review.

(3) Where necessary, such as when market data is limited or unavailable, the Assessor shall utilize appraisal judgment so long as it is reasonably designed to arrive at the market value of the mineral reserves being appraised.

(4) The Assessor’s estimates shall be presumed indicative of market rates and the resulting market value absent evidence from the Taxpayer supporting different assumptions for the particular reserves being appraised. In order to rebut the presumption, the Taxpayer must provide the Assessor with either market data or information specific to the reserves being appraised. Mere criticism of the Assessor’s methodology is not sufficient by itself to overcome the presumption of correctness.

(5) The following example illustrates how Assessors should value a parcel with active mining of coal reserves:

Assume that a coal mine is found to have 50,000 tons of reserves in place. Its production

history establishes that annual production is 10,000 tons. This would indicate an economic life of five years (50,000 ÷ 10,000 = 5). Assume an economic royalty rate of $2.00 per ton, allowable expenses of 10% of gross income and a discount rate of 16%. The following calculation demonstrates how to calculate the present worth of the reserve:

July, 2017 10,000 -- annual production in tons x 2.00 -- economic royalty in dollars $20,000 -- gross annual income -2,000 -- allowable expenses in dollars $18,000 -- net operating income x 3.274294 -- the present value of the right to receive $1 per period for five years at a 16% discount rate $58,937 -- present net worth of reserve The above example assumes a level annuity, which would be appropriate for a coal mine where the coal is being mined at a constant rate.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-801.
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.08 VALUATION OF ACTIVE MINERAL RESERVES – OIL AND GAS WELLS

(1) The Assessor shall value oil and gas wells by compiling the information necessary to complete the spreadsheet or a facsimile in Appendix B.

(2) In order to complete the spreadsheet in Appendix B, the Assessor shall utilize the following procedure to the extent practicable:

(a) In order to determine the appropriate integration of separately owned and leased parcels that are unitized into drilling and production units, the Assessor shall send operators an annual schedule or questionnaire to determine the identity, address and percentage of ownership of each parcel comprising the unit from which oil and/or gas is being recovered;

(b) Contact the Tennessee Board of Water Quality, Oil and Gas, or other appropriate entity, to obtain the previous year’s production for each oil and gas well and the average cost per barrel;

(c) Estimate an appropriate discount rate and decline rate for each well by reviewing the best available market data and factors relevant to the individual well being appraised;

(d) Update the total production for each well;

(e) Prepare separate oil and gas appraisals for each well;

(f) Reduce the indicated value by the appraisal ratio for the tax year and jurisdiction under review; and (g) Allocate the equalized values for each well between all parcel owners based upon their percentage of ownership.

(4) The Assessor’s estimates shall be presumed indicative of the market absent evidence from the Taxpayer supporting different assumptions for the particular reserves being appraised. In order to rebut the presumption, the Taxpayer must provide the Assessor with either market data or information specific to the reserves being appraised. Mere criticism of the Assessor’s methodology is not sufficient by itself to overcome the presumption of correctness.

July, 2017 (5) The following example illustrates how Assessors should value a parcel with active oil and gas reserves:

Assume that an oil well has an economic life of five years, a decline rate of 20%, an initial annual net income of $5,000, and a discount rate of 16%. The present net worth of the reserve would be calculated as follows:

Present Worth of 1 Year Net Annual Income Discount Factor Discounted Value 1 $5,000 x .862069 = $4,310.34 2 $4,000 x .743163 = 2,972.65 3 $3,200 x .640658 = 2,050.11 4 $2,560 x .552291 = 1,413.86 5 $2,048 x .476113 = 975.08 Present Worth = $11,722.04

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-801.
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.09 VALUATION OF ACTIVE MINERAL RESERVES OTHER THAN COAL, OIL OR GAS

Consistent with these rules, the Assessor may utilize whatever appraisal methodology appears most appropriate in a particular situation so long as the methodology is reasonably designed to arrive at the market value of the mineral reserves being appraised.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-801.
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.10 VALUATION AND SUBCLASSIFICATION OF DEPLETED MINERAL RESERVES

(1) Since any remaining mineral reserves have no contributory value, such parcels will normally be subclassified as farm property and valued according to the rural land schedule utilized by the county where the property is located.

(2) Where extraction of the mineral(s) has damaged the land and reduced its market value, the estimate of market value should be adjusted to reflect the loss in value.

(3) When a parcel with depleted mineral reserves has been converted to an alternative industrial or commercial use, it will normally be subclassified as industrial and commercial property and valued assuming such a highest and best use.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-801.
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.11 VALUATION AND SUBCLASSIFICATION OF INACTIVE MEASURED MINERAL

RESERVES.

Parcels falling within this classification shall be valued and subclassified in the same manner as parcels with active mineral reserves.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-801.
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017. July, 2017

Tenn. Comp. R. & Regs. 0600-11-.12 VALUATION AND SUBCLASSIFICATION OF INACTIVE INDICATED MINERAL

RESERVES.

(1) Mineral reserves that cannot be reliably measured have no contributory value for property tax purposes.

(2) Parcels with inactive indicated mineral reserves should be valued and subclassified without consideration of any mineral reserves.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-801.
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.13 QUESTIONNAIRES AND REPORTING SCHEDULES

(1) When necessary, the Assessor may send operators and/or other holders of mineral interests annual questionnaires and/or reporting schedules designed to obtain information necessary to identify and appraise mineral reserves.

(2) In the event an operator or holder of a mineral interest fails to complete and return a questionnaire or reporting schedule after a reasonable opportunity to do so, the Assessor may either (a) assume the prior year’s operating history is representative of future years’ production; or (b) make any necessary estimates based upon available market data and the operating history of similar mines and/or wells.

(3) The Assessor’s estimates shall be presumed indicative of market rates and the resulting market value absent evidence from the Taxpayer supporting different assumptions for the particular reserves being appraised. In order to rebut the presumption, the Taxpayer must provide the information requested in the questionnaire and/or reporting schedule that was not completed and returned. Mere criticism of the Assessor’s estimates is not sufficient by itself to overcome the presumption of correctness.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-303.
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.14 MAINTENANCE

Unlike other types of real property, mineral properties are subject to depletion, which may cause the value of a parcel to diminish each year as reserves are extracted. Conversely, it is also possible for the mineral value of a parcel to increase due to market conditions, technological advances, and the discovery of additional reserves. Such factors necessitate the annual review of mineral assessments by Assessors.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-504(a).
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Tenn. Comp. R. & Regs. 0600-11-.15 ASSESSOR’S RECORDS

The Assessor shall note on the property record card all instances when mineral reserves have been assessed. Although no particular format must be used due to the various assessment systems employed throughout Tennessee, mineral assessments should be readily identifiable by utilization of a special interest card, property identifier, or the equivalent.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d) and 67-5-804.
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017. July, 2017

Tenn. Comp. R. & Regs. 0600-11-.16 EFFECTIVE DATE

After this chapter takes effect, these rules shall apply to the tax period beginning January 1, 2017 and all subsequent tax periods.

History

Authority: T.C.A. §§ 67-1-305 and 67-5-504(a).
Administrative History: Original rule filed April 25, 2017; effective July 24, 2017.

Chapter 0600-12 Multiple-Use Subclassification

Tenn. Comp. R. & Regs. 0600-12-.01 PURPOSE

The purpose of these rules is to implement the provision of T.C.A. § 67-5-801(b) concerning the establishment of guidelines for apportionment among subclasses where a parcel of real property is used for more than one (1) purpose, which would result in different subclassifications and different assessment percentages.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-801(b).
Administrative History: Original rules filed August 23, 2017; effective November 21, 2017.

Tenn. Comp. R. & Regs. 0600-12-.02 APPLICABILITY

These rules apply to those situations where a parcel of real property is used for more than one purpose and it is necessary to assign different subclassifications and assessment percentages to each use.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-801(b).
Administrative History: Original rules filed August 23, 2017; effective November 21, 2017.

Tenn. Comp. R. & Regs. 0600-12-.03 DEFINITIONS

As used in these rules, unless the context otherwise requires:

(1) “Assessment percentage” means the rate of assessment set forth in T.C.A. § 67-5-801(a) for ‘public utility property,’ ‘industrial and commercial property,’ ‘residential property,’ and ‘farm property.’ (2) “Farm property” is defined as in T.C.A. § 67-5-501(3).

(3) “Industrial and commercial property” is defined as in T.C.A. § 67-5-501(4).

(4) “Mobile home” is any movable structure and appurtenance that is attached to real property by virtue of being on a foundation, or being underpinned, or connected with any one (1) utility service, such as electricity, natural gas, water, or telephone.

(5) “Multiple-use subclassification” means the apportionment of different assessment percentages among subclasses when a parcel of real property is used for more than one

purpose which would result in different subclassifications.

(6) “Public utility property” is defined as in T.C.A. § 67-5-501(8).

November, 2017 (7) “Residential property” is defined as in T.C.A. § 67-5-501(10).

(8) “Subclass” and “Subclassification” mean the classification of real property as public utility property, industrial and commercial property, residential property or farm property in accordance with T.C.A. §§ 67-5-501 and 67-5-801(a).

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-801(b).
Administrative History: Original rules filed August 23, 2017; effective November 21, 2017.

Tenn. Comp. R. & Regs. 0600-12-.04 DETERMINING WHEN MULTIPLE-USE SUBCLASSIFICATION IS APPROPRIATE

(1) Many properties are used for more than one purpose simultaneously. Where the uses of a property fall into two (2) or more subclasses, the assessor shall determine the share of the market value of the property attributable to each subclass and assess the property according to the proportion each share constitutes of the total market value.

(2) Multiple-use subclassification is appropriate only where each of the uses recognized for subclassification is distinct and ongoing. Where a parcel is used predominantly for one

purpose and another use is sporadic and generates de minimis annual income, the parcel should be assessed in accordance with the predominant use. Where a parcel is used predominantly for one purpose and another use as described above is sporadic but generates regular annual income that is not de minimis, the parcel should be assessed using multipleparcel subclassification.

(3) Below are examples of when multiple-use subclassification is appropriate:

(a) Home businesses run from a residential property to carry on a trade or business such as a beauty salon, small day care, or car repair service (portion used in business to be subclassified commercial);

(b) A building with a retail store on the first floor and an owner-occupied residence on the second floor (portion used in business to be subclassified commercial);

(d) Mobile home parks with on-site privately owned mobile homes (portions rented to be subclassified commercial, owner-occupied mobile home to be subclassified residential);

(e) Properties used in the commercial production of farm products and nursery stock but which also have uses not within the definition of “agriculture” otherwise provided by law.

As used in the rules, “commercial production of farm products and nursery stock” means the production is consistent with a farm operating for profit for federal income tax purposes. Examples requiring a split subclassification of agricultural property would include portions of a farm that generate regular annual income (as opposed to sporadic and de minimis income) from regular rental of space set aside for parking or camping, or portions of a horse farm devoted to uses such as a shop engaged in the retail sale of tack. Boarding of animals integral to breeding, raising and development of horses and other livestock at the property is not considered a commercial use for purposes of these rules;

(f) Portions of farms with commercial activities unrelated to production of farm products or livestock, except commercial activities constituting “agriculture” as defined by law.

Improvements and structures on, and land that is part of, a farm engaged in the commercial production of farm products or nursery stock that are used for “agriculture”

November, 2017 may be classified as farm property, provided the land improvement or structure in question is used for one or more of the following: (1) recreational or educational activities; (2) retail sales of products produced on the farm, but only if a majority of the products sold are produced on the farm; or (3) entertainment activities conducted in conjunction with, but secondary to, the commercial production of farm products or nursery stock. Commercial subclassification of those portions of a farm used for events unrelated to agriculture shall be limited to the actual land and structures dedicated to the unrelated uses.

The foregoing are only examples and do not represent all situations where multiple-use subclassification is appropriate.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-801(b).
Administrative History: Original rules filed August 23, 2017; effective November 21, 2017.

Tenn. Comp. R. & Regs. 0600-12-.05 APPORTIONING ASSESSMENT PERCENTAGES AMONG SUBCLASSES

Where the uses of a property include two (2) or more subclasses, the assessor shall apply the appropriate assessment percentage to each subclass. In order to determine the appropriate assessment percentage for each subclass, the assessor shall first determine the share of the total market value attributable to each subclass.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-801(b).
Administrative History: Original rules filed August 23, 2017; effective November 21, 2017.

Tenn. Comp. R. & Regs. 0600-12-.06 APPORTIONING VALUE AMONG MULTIPLE SUBCLASSES

(1) Where the uses of a property include two (2) or more subclasses, the assessor shall determine the share of the market value of the property attributable to each subclass and value the property according to the proportion each share constitutes of the total market value.

(2) In determining the market value of the property, the assessor shall determine the highest and best use of the property.

(a) In certain instances, the predominant use of the property constitutes the highest and best use and the assessor must apportion the total value of the property among the subclasses based upon the predominant use. An example of such a situation is a residence with a home business that does not increase the overall market value of the property, such as a small hair salon. In this example, the assessor should value the property as a single family residence and apportion the total value between the residential and commercial uses.

(b) In certain instances, the highest and best use of the property is for multiple purposes.

An example of such a situation is a manufacturing facility with excess acreage utilized for farming. In this example, the highest and best use of the acreage is for two distinct purposes: farming and manufacturing. The assessor must value the acreage and buildings used for farming separately from the acreage and buildings utilized in conjunction with manufacturing. The two resulting values would then be added together to determine the total value of the property.

(3) The assessor shall apportion the total market value of the property by assigning separate values to each subclass. The apportionment shall reflect the land and improvement values assigned to each subclass. In those instances where the land or improvements has insignificant value for one of the uses, the assessor may properly assign a separate value to only the component having a measurable value.

November, 2017 (4) The assessor may utilize whatever appraisal methodology appears most appropriate in a particular situation so long as it is reasonably designed to arrive at the market value of the respective subclasses and/or total value of the parcel.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-801(b).
Administrative History: Original rules filed August 23, 2017; effective November 21, 2017.

Tenn. Comp. R. & Regs. 0600-12-.07 EXAMPLES OF APPORTIONING AMONG SUBCLASSES

EXAMPLE A

The Taxpayer owns a 2,000-square-foot single residence situated on a one (1) acre lot with a total market value of $110,000. The assessor has appraised the home at $100,000 and the land at $10,000. The Taxpayer utilizes 500 square feet of her home as a hair salon. Customers park in her gravel driveway. The market value of the Taxpayer’s parcel is $110,000 with or without the hair salon. The assessor should value the property at $110,000 since the predominant use of the property as a residence constitutes the highest and best use and the hair salon does not increase the overall value of the property. The assessor should subclassify the 500 square feet used for the hair salon as “industrial and commercial property.” The assessor would subclassify the remaining 1,500 square feet as “residential property.” Since there is no dedicated parking area and the use of the driveway by customers is insignificant, there is no need to assess any of the land as “industrial and commercial property.”

EXAMPLE B

Suppose the facts are the same as in Example A except that the Taxpayer has gone ahead and created a designated parking area by paving and setting aside a 0.1 acre portion of the driveway. In this example, the assessor would subclassify the 0.1 acre portion of the driveway designated for customer parking as “industrial and commercial property” because the predominant use of that portion of the driveway is for customer parking.

EXAMPLE C

A Corporation purchased a 100-acre parcel of land and constructed a manufacturing facility. Although the manufacturing operation only requires 25 acres of land, the corporation purchased 100 acres in the event it ever decides to expand. Presently, the corporation has no use for 75 acres and leases it to a farmer who raises soybeans. In this example, the assessor should subclassify 25 acres and the associated buildings and improvements as “industrial and commercial property.” The remaining 75 acres is properly subclassified as “farm property.”

EXAMPLE D

A farmer has been operating a 100-acre horse farm which the assessor has historically subclassified as “farm property.” The farmer decides to open a tack shop and utilizes two (2) acres for a retail store and associated parking. In addition, the farmer accepted the local public utility’s offer to lease five (5) acres for its operations. In this example, the assessor should subclassify the 93 acres and associated buildings and improvements used for the horse farm as “farm property.” The two (2) acres and building used for the tack shop should be subclassified as “industrial and commercial property.” The five (5) acres leased to the public utility should be subclassified as “public utility property.”

EXAMPLE E

November, 2017 A mobile home park owner owns the land and multiple homes located on the land within the mobile home park, and he leases out the mobile homes to tenants. All of the property (land, improvements, and mobile homes) should be subclassified as “industrial and commercial property”. On the other hand, if a mobile home park owner owns the land within the mobile home park but leases the land out to multiple tenants who own their own mobile homes situated on the land, then the land and any improvements rented with the land should be subclassified as “industrial and commercial property” but each mobile home that is used for residential purposes by the mobile home owner or owner’s lessee should be subclassified as “residential property” unless it is part of multiple rental units under common ownership.

History

Authority: Tennessee Constitution, Article II, § 28; T.C.A. §§ 4-3-5103, 67-1-305, 67-5-502(a)(1), 67-5- 501, 67-5-502(a)(1), 67-5-801(b), and 67-5-802(a)(1).
Administrative History: Original rules filed August 23, 2017; effective November 21, 2017.

Tenn. Comp. R. & Regs. 0600-12-.08 ASSESSOR’S RECORDS

The assessor shall note on the property record card all instances wherein multiple-use subclassification has been used. Although no particular format must be utilized due to the various assessment systems employed throughout Tennessee, two acceptable formats are the creation of special interest cards or listing the multiple subclasses on different pages of the property record cards. Regardless of the format used, the property record card shall reflect both the value and assessment percentage assigned to each subclass.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, 67-5-801(b), and 67-5-804.
Administrative History: Original rules filed August 23, 2017; effective November 21, 2017.

Chapter 0600-13 Certified and Equalized Tax Rates

Tenn. Comp. R. & Regs. 0600-13-.01 PURPOSE

These standards address the procedures, processes, time frames, and statutory responsibilities for computing and implementing certified and equalized property tax rates. They provide a reference for uniform methods for setting certified and equalized property tax rates.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-1601.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Tenn. Comp. R. & Regs. 0600-13-.02 APPLICABILITY

These rules apply to all jurisdictions as well as multi-county jurisdictions undergoing reappraisal or current value updating during a given tax year.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-1601.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Tenn. Comp. R. & Regs. 0600-13-.03 DEFINITIONS

As used in these rules, unless the context otherwise requires:

(1) “Appeals allowance” means either the projected loss of reappraisal assessment base due to appeals, or the portion of the certified rate attributed to this projected loss.

(2) “Appraisal ratio” means a ratio based on a comparison of appraised values recorded for real property and actual values based on recent sales and/or expert appraisals. The appraisal ratio indicates generally what percent of fair market value is represented by the appraised value of a property.

(3) “Centrally assessed property” means property that is assessed by the Comptroller of the Treasury under the provisions of T.C.A. §§ 67-5-1301, et seq.

(4) “Computer Assisted Mass Appraisal (CAMA)” means a system of appraising property that incorporates statistical analyses such as multiple regression analysis and adaptive estimation procedure to assist skilled and trained appraisers in estimating real property values.

(5) “Certified tax rate” means a tax rate calculated pursuant to the provisions of T.C.A. § 67-5-1701 that will generate the same revenue for a jurisdiction as was levied during the preceding tax year.

June, 2020 2 (6) “Construction in process (CIP)” means personal property that is treated as construction in process for federal income tax purposes as of January 1 of a given year.

(7) “Current value update (CVU)” means an updating of all real property values if the overall level of appraisal for the jurisdiction is less than ninety percent (90%) of fair market value in the third year of a six year reappraisal cycle as set forth in T.C.A. § 67-5-1601(a)(2).

(8) “Equalized tax rate” means the rate determined for cities that lie in more than one county pending a general reappraisal or current value update to adjust the city tax rate to accommodate differing levels of assessment within the city. The purpose of this approach is to adjust the city tax rate so that all properties are taxed uniformly when both the rate and assessed value are considered together.

(9) “Integrated Multi-Processing of Administrative and CAMA Technology system (IMPACT)” refers to the State’s computer-assisted mass-appraisal system that maintains property tax assessments made by county assessors for the majority of Tennessee counties.

(10) “Jurisdiction” means the city or county for which the rate is being calculated.

(11) “Locally assessed property” means property that has its assessment determined by an official of the local jurisdiction where the property is located.

(12) “Multi-county jurisdiction” means a city or special school district that lies in more than one county.

(13) “New land” means real properties qualifying for greenbelt classification for the first time in the reappraisal year or real properties that no longer qualify for greenbelt classification in the reappraisal year. This may necessitate an adjustment in the tax rate (to adjust the levy for new greenbelt properties or to adjust the base for properties that no longer qualify for greenbelt classification).

(14) “New personal property” means tangible personal property taxable for the first time in the current tax year. The assessed value of new personal property is listed on line one of each group on the annual personal property schedule, with the exception of groups 7, 8 and 10.

(15) “New real property” means locally assessed real property taxable for the first time in a reappraisal or current value update tax year. Real property is defined by state law to include land, structures and improvements on land, certain mobile homes, and machinery and equipment affixed to the land.

(16) “Non-IMPACT county” means a county that maintains a Computer Assisted Mass Appraisal system other than IMPACT.

(17) “Outbuildings and yard items (OBY’s)” are extra features of buildings or improvements to land not included elsewhere.

(18) “Parcel” means land, including the resources in and on it, and the buildings and permanent fixtures attached to it. It may be a contiguous tract of land or one of several lots on a plat, separately owned, either publicly or privately, and capable of being separately conveyed.

(19) “Parcel identification number” is the numeric or alphanumeric description of a parcel that identifies it uniquely.

(20) “Payments in lieu of taxes (PILOT)” are payments made by private taxpayers, often businesses, to a local government to help offset losses in property taxes with respect to property that is tax exempt.

June, 2020 3 (21) “Preceding year” means the tax year immediately preceding the current tax year.

(22) “Prorate” means to value an improvement to land completed during the tax year by reducing its full value by the proportion of the tax year before it was completed.

(23) “Raw material” means items of tangible personal property, crude or processed, which are held or maintained by a taxpayer for use through refining, combining, or any other process in the production or fabrication of another item or product.

(24) “Real property” is as defined by T.C.A. § 67-5-501(10).

(25) “Reappraisal” means a revaluation of all property within a jurisdiction completed on a continuous cycle as set forth in T.C.A. § 67-5-1601.

(26) “Recapture rate” means the actual tax rate from the reappraisal year minus the amount by which the reappraisal year certified tax rate was overstated due to an excessive appeals allowance.

(27) “Scrap property” refers to personal property no longer capable of use and for which there is no reasonable expectation of repair.

(28) “Special school district (SSD)” is a school district created by the General Assembly that collects property taxes, the rates of which are set by the General Assembly. These districts must use the legislated rate until reappraisal, after which they must use the tax-neutral rate until the General Assembly acts to set a new rate.

(29) “Tangible personal property” is as defined by T.C.A. § 67-5-501(13).

(30) “Tax increment financing (TIF)” is a tool used by local governments to encourage development in targeted areas by allocating to particular facilities the additional tax revenues produced by these facilities for a certain period.

(31) “Tax year” means the period of January 1 through December 31 of the year in which property taxes become due.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-1601.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Tenn. Comp. R. & Regs. 0600-13-.04 OVERVIEW

These standards provide the administrative framework for setting property tax rates including certified and equalized tax rates. Included are definitions, property tax rate calculation procedures beginning with certifying the tax rate, information on various rates (levies), guidelines for increasing taxes, and procedures for final approval of the rates.

In order for a rate to be finalized, the following procedure must be followed:

(1) Certified tax rate:

(a) Assessor of property reviews calculation.

(b) After assessor review, calculation is forwarded to the chief executive of the Jurisdiction and/or SSD for approval and signature.

June, 2020 4 (c) After calculation is signed by chief executive and assessor of property, the form is returned to the State Board of Equalization.

(2) Equalized tax rate:

(a) Calculation is sent to respective Jurisdiction’s chief executive.

(b) Copies of the calculation are sent to the respective assessors of property and finance directors.

(c) After calculation is signed by the chief executive and assessors of property, the form is returned to the State Board of Equalization.

(3) In order for a rate to be finalized, each taxing jurisdiction must first approve a tax rate. If the rate is less than or equal to the rate certified by the State Board of Equalization, no further documentation, other than the signed calculation form, is required by the State Board.

If the tax rate set by the Jurisdiction exceeds the rate certified by the State Board, then the appropriate documents should be submitted to the State Board per T.C.A. § 67-5-1702.

Use of mathematical rounding in rate calculations (rounding up a certified rate) is not permitted under the applicable law.

Once all legal requirements have been met in adopting a certified or equalized tax rate, the State Board of Equalization will concur in the rate and authorize release of tax notices for the respective jurisdiction.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-1601.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Tenn. Comp. R. & Regs. 0600-13-.05 DETERMINING CERTIFIED AND EQUALIZED TAX RATES

The first step is to determine the type of calculation needed: 1) Certified tax rate; or 2) Equalized tax rate.

(1) Certified tax rate:

(a) The first step is to set a pro forma current year tax base for the jurisdiction by removing new property from the locally assessed property tax base and then adding estimated centrally assessed property.

(b) The second step is to determine the preceding year’s property tax levy.

(c) The third step is to determine the certified tax rate. Divide the preceding year’s property tax levy by the pro forma current year tax base and multiply by 100.

EXAMPLE

A city’s preceding year tax levy is $14,352,424, and the pro forma current year tax base is $723,120,031. The following is an example of the calculation: $14,352,424/723,120,031*100 = $1.9848 (Certified tax rate)

(2) Equalized Tax Rate:

June, 2020 5 (a) The first step is to fix a pro forma equalized current year tax base for the city by removing new property from the locally assessed tax base and then adding the estimated centrally assessed property for the part of the city lying in each county.

(b) The second step is to determine the preceding year property tax levy for each part of the city lying in different counties. These numbers from each part of the city are added together to arrive at the total preceding year property tax levy used in the fourth step.

part of the city by dividing the adjusted current year total assessment in each part of the city by the current year’s approved appraisal ratio. These numbers are added together to arrive at the total equalized adjusted assessment used in the fourth step.

EXAMPLE

A city’s current year adjusted assessment is $3,934,948 for JUR 1 and $1,545,591 for JUR 2, and the current year appraisal ratio is 1.0000 for JUR 1 and .8200 for JUR 2. The following is an example of the calculation:

JUR 1 – Adjusted Assmt. $3,934,948 Appraisal Ratio 1.0000 JUR 2 – Adjusted Assmt. $1,545,591 Appraisal Ratio .8200 JUR 1 – $3,934,948/1.0000 = $3,934,948 (current year equalized adjusted assmt.)

JUR 2 – $1,545,591/.8200 = $1,884,867 (current year equalized adjusted assmt.)

Add JUR 1 and JUR 2 equalized adjusted assmt.: $3,934,948 $1,884,867 $5,819,815 (Total current year equalized adjusted assmt.)

(d) The fourth step is to determine an overall equalized tax rate by dividing the total equalized adjusted assessment by the total preceding year property tax levy times 100.

EXAMPLE

A city’s total preceding year property tax levy is $44,636, and the total current year equalized adjusted assessment is $5,819,815. The following is an example of the calculation:

JUR 1 – Preceding Year Tax Levy $30,062 Equalized Adjusted Assmt. $3,934,948 JUR 2 – Preceding Year Tax Levy $14,574 Equalized Adjusted Assmt. $1,884,867 TOTAL: $44,636 TOTAL: $5,819,815 $44,636/$5,819,815*100 = $0.7670 (Overall Estimated Tax Rate)

(e) The fifth step is to determine the equalized tax rate for the part of the city lying in each county by dividing the overall equalized tax rate by the approved current year appraisal ratio for each county.

EXAMPLE

A city’s overall equalized tax rate is $0.7670. The current year appraisal ratio for JUR 1 is 1.0000 and .8200 for JUR2. The following is an example of the calculation:

June, 2020 6 JUR 1 – $0.7670/1.0000 = $0.7670 (current year equalized tax rate)

JUR 2 – $0.7670/.8200 = $0.9353 (current year equalized tax rate)

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-1601.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Tenn. Comp. R. & Regs. 0600-13-.06 DETERMINING ESTIMATED CENTRALLY ASSESSED PROPERTY

(1) Determining the estimated centrally assessed property includes the following two (2) components: 1) Preceding year State Board of Equalization certified assessment of centrally assessed property for the jurisdiction; and 2) Preceding year approved appraisal ratio.

(2) EXAMPLE OF DETERMINING ESTIMATED CENTRALLY ASSESSED PROPERTY:

EXAMPLE

This example assumes that the public utility assessment certified by the State Board of Equalization for the preceding year is $11,369,770 and the preceding year’s approved appraisal ratio is .7912. The following is an example of the calculation: $11,369,770/.7912 = $14,370,285 ($14,370,285 = estimated centrally assessed property)

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-1601.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Tenn. Comp. R. & Regs. 0600-13-.07 DETERMINING NEW PROPERTY

(1) New real property reporting:

New real property must be deducted from the current year pro forma tax base. Below is a listing of types of new real property that should be deducted:

(a) Dwellings (b) Dwellings (pro-rated)

(e) Commercial (f) Commercial (pro-rated)

(g) Additions (h) Additions (pro-rated)

(2) New personal property reporting:

(a) New tangible personal property must be deducted from the current year pro forma tax base. New tangible personal property is determined by adding together year one of each group on the personal property schedule, with the exception of the three non-depreciable groups (Group 7-scrap property; Group 8-raw materials, supplies; and Group 10-CIP).

June, 2020 7 (b) Tangible personal property which has been removed from the current year actual tax base (due to exemptions or physical removal by owners) since the preceding year should be deducted from the preceding year property tax levy.

(3) New land reporting:

(a) Properties that qualify for greenbelt classification for the first time in the reappraisal year, or that cease to qualify for greenbelt in the reappraisal year may necessitate an equalized tax rate adjustment (adjust the preceding year tax levy for new greenbelt; adjust current year pro forma tax base for properties being removed).

(b) EXAMPLES OF DETERMINING NEW LAND:

EXAMPLE

This example treats 60 acres as divided, but in fact all 100 acres from the preceding year have been divided. If the 100-acre parcel from the preceding year has become a 40-acre parcel and 60 one-acre parcels in the current year, all the new parcels are ‘child’ parcels (including the 40-acre remnant), even if one of them still bears the same parcel identification number as the former 100-acre parcel. To calculate the ‘new land’ for tax rate purposes, take the hypothetical ‘reappraisal’ assessed value of the 100 acres as if it had remained intact, minus the preceding year’s assessed value of the 100 acres. That difference is attributable to the reappraisal, and the balance of the new assessed value for the 40 acre and the 60 one-acre parcels, will be the ‘new land.’

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-1601.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Tenn. Comp. R. & Regs. 0600-13-.08 DETERMINING PRECEDING YEAR TAX LEVY

(1) Determining the preceding year tax levy comprises the following components: 1) Total preceding year tax base; and 2) Preceding year tax rate.

(2) EXAMPLE OF DETERMINING PRECEDING YEAR TAX LEVY:

EXAMPLE

A Jurisdiction’s preceding year total tax base is $4,561,666,107 (Jurisdiction’s preceding year State Board of Equalization certified total centrally assessed property + Jurisdiction’s preceding year total locally assessed property) and the jurisdiction’s preceding year tax rate is $2.50 for every $100 in value. The following is an example of the calculation: $4,561,666,107/100*2.50 = $114,041,653 (Preceding Year Tax Levy)

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-1601.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Tenn. Comp. R. & Regs. 0600-13-.09 ADJUSTMENTS TO THE TAX RATE

(1) Adjustments for property tax incentives are limited to instances where an incentive payment in lieu of tax is calculated on the basis of the actual rate applied to a fixed assessment and not a percentage of an assessment.

(2) In determining TIF adjustments, the jurisdiction may also exclude from the taxable value appearing on the roll:

June, 2020 8 (a) The taxable value of properties subject to tax increment financing provisions adopted by the governing body pursuant to statute; and (b) The taxable value of properties within an area for which an economic impact plan has been approved by the governing body.

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-1601.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Tenn. Comp. R. & Regs. 0600-13-.10 APPEALS ALLOWANCE AND RECAPTURE RATE

(1) Determining the appeals allowance must be based on the proportion of atypical appeals reductions experienced by the city or county in the most recent one or more reappraisals.

The allowance is derived not merely from the percentage of assessment loss due to appeals in the past reappraisal(s) but on the amount by which this percentage loss exceeded the typical assessment loss due to appeals in a non-reappraisal year. The calculation submitted to the State Board of Equalization should therefore include documentation of the total assessment base before and after appeals, for the year of the most recent reappraisal and the year before the most recent reappraisal. The allowable adjustment is the percentage by which the reappraisal year percentage loss exceeded the loss from the year before. If data is available for more than one recent reappraisal, an average may be used. If no verifiable data is available, the allowance is not permitted. In order for an allowance to be administered it must be approved by the Executive Secretary of the State Board of Equalization.

(a) Explanation of calculation: The appeals allowance will appear in the certified tax rate calculation as an assessment amount to be deducted from the reappraisal year assessment base, and the amount is determined by multiplying the reappraisal year assessment base (local assessments only) times the percentage determined under item (1) above.

(b) Upon receipt of the assessor’s report, the State Board staff shall record net aggregate assessment reductions by the county board of equalization in the certified tax rate file for each city and county. In addition, on or before May 1 st of the year following the reappraisal, the State Board staff shall record in the certified tax rate files, the net aggregate assessment reductions by the State Board of Equalization to date for the reappraisal year. If the total of these assessment reductions exceeds the appeals allowance used in the certified tax rate, the Board shall notify the assessor and the chief executive officer of the city or county, and a certified recapture rate shall be calculated and determined for the city or county for the year following the reappraisal.

(2) The recapture tax rate shall be the actual tax rate from the reappraisal year, reduced by the amount by which the reappraisal year certified tax rate was overstated due to the excessive appeals allowance. The city or county may not exceed the certified recapture tax rate in the year following the reappraisal. without providing public notice and hearing in the same manner provided for exceeding the certified tax rate in a year of reappraisal. The city or county must provide the same compliance documentation regarding the recapture rate as is required when a certified tax rate is exceeded (affidavit of publication and certified copy of tax rate ordinance/resolution).

June, 2020 9 (3) EXAMPLE OF DETERMINING RECAPTURE RATE:

EXAMPLE

Calculation for certified recapture rate City of ___________, 2019 (as of 6-30-19)

Line no. Item 1 2018 assessed value 130,793,172 2 (+) 2018 appeals allowance 1,053,000 3 Unadjusted assessments 131,846,172 4 (-) Net assmt. changes 849,130 5 Adjusted base 130,997,042 6 Certified tax rate levy 1,106,069 7 Rate bef. 2018 increase 0.844 (line6/line5) 8 2018 increase (if any) 0.01 9 Recapture rate 0.854 SIGNED:______________________ __________________________ Assessor Mayor

History

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-1601.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Chapter 0600-14 Assessment of Commercial and Industrial Leasehold Interests

Tenn. Comp. R. & Regs. 0600-14-.01 APPLICABILITY

Unless otherwise provided herein these rules shall govern the procedure for valuation of any industrial and commercial Leasehold Interest held by a non-governmental entity in real property owned by the United States government, the State of Tennessee, any county, or any incorporated town, city or taxing district, or any agency or political subdivision thereof.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d), and 67-5-605.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Tenn. Comp. R. & Regs. 0600-14-.02 DEFINITIONS

As used in these rules and in interpretation of T.C.A. § 67-5-502 and T.C.A. § 67-5-605, unless context requires otherwise:

(1) “Taxable Interest” means an interest in real property subject to assessment and taxation.

(2) “Leasehold Interest” means an interest in real property under the terms of a lease or agreement for a specified period of time.

(3) “Leasehold Owner” means the owner of the current Leasehold Interest, typically the lessee.

(4) “Real Property Interest” means an interest in real property arising from the combination of a physical relationship to the property that confers a degree of physical control over the property and the intent to exercise such control to the exclusion of others. Neither the right to use nor the right to enter and leave property is sufficient to create a Real Property Interest.

(5) “Actual Rent” means rent or other compensation paid under a lease or similar agreement.

(6) “Imputed Rent” means those costs paid by the lessee that are typically borne by the lessor or owner of the property, including the cost of capital improvements, real property maintenance, and the cost of insurance. The term of the lease or other agreement, including optional renewal terms, shall be used for purposes of amortizing the cost of real-property, capital, or other improvements borne by the Leasehold Owner.

(7) “Fair Market Rent” means the fair market annual rental value for a Leasehold Interest based upon rents paid to lease comparable properties.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d), and 67-5-605.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020. June, 2020 2

Tenn. Comp. R. & Regs. 0600-14-.03 ASSESSABLE LEASEHOLD INTERESTS

In order for a Leasehold Interest to create a Taxable Interest:

(1) The fee interest in the real property must be exempt from property taxes;

(2) The property must be used primarily for the private benefit of the lessee with any public purpose being only incidentally served;

(3) The lease must convey a Real Property Interest in the subject property to the lessee;

(4) The property must not otherwise be the subject of a lawful agreement between a lessee and a local government, or instrumentality thereof, for payments in lieu of taxes entered into or amended on or after April 30, 2019; and (5) The Leasehold Interest must have a taxable value.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d), and 67-5-605.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Tenn. Comp. R. & Regs. 0600-14-.04 VALUING COMMERCIAL AND INDUSTRIAL LEASEHOLD INTERESTS

The value of the excess, if any, of the Fair Market Rent over the Actual Rent and Imputed Rent must first be determined. If the Fair Market Rent for a subject property is equal to or less than the combination of the Actual Rent and the Imputed Rent, then the Leasehold Interest has no taxable value. If the Fair Market Rent for a subject property exceeds the combination of the Actual Rent and the Imputed Rent, then the excess, calculated on an annual basis, is discounted over the remaining term in years, including optional renewal terms, to its present value as of the appraisal date, which represents the taxable value of the Leasehold Interest.

History

Authority: T.C.A. §§ 67-1-305, 67-5-502(d), and 67-5-605.
Administrative History: Original rules filed April 1, 2020; effective June 30, 2020.

Chapter 0600-15 Rules Governing Public Comment at Meetings

Tenn. Comp. R. & Regs. 0600-15-.01 PURPOSE

The purpose of these rules is implementation of the provisions of Public Chapter 300, Acts of 2023, amendment to Tenn. Code Ann., Title 8, Chapter 44, Part 1 which requires the Board to reserve a period for public comment to provide the public with the opportunity to comment on matters that are germane to the items on the agenda for any applicable Meeting occurring on or after July 1, 2023.

History

Authority: T.C.A. §§ 8-44-112 and 67-1-305.
Administrative History: New rules filed November 7, 2024; effective February 5, 2025.

Tenn. Comp. R. & Regs. 0600-15-.02 APPLICABILITY

These rules apply to all members of the public requesting to comment at a Meeting before the Board or any subsidiary Governing Body of the Board. The opportunity for public comment authorized in these rules is separate and apart from the opportunity of parties in contested case proceedings to present oral argument in accordance with Tenn. Comp. R. & Regs. 0600-01 and Tenn. Code Ann. § 4-5-315(e).

History

Authority: T.C.A. §§ 4-5-315 and 8-44-112.
Administrative History: New rules filed November 7, 2024; effective February 5, 2025.

Tenn. Comp. R. & Regs. 0600-15-.03 DEFINITIONS

As used in these rules, unless the context otherwise requires:

(1) “Board” means the State Board of Equalization or any subsidiary governing body of the State Board of Equalization.

(2) “Governing Body” means any entity as defined by Tenn. Code Ann. § 8-44-102.

(3) “Meeting” means any meeting subject to the requirements of Tenn. Code Ann. § 8-44-112.

History

Authority: T.C.A. §§ 8-44-102 and 8-44-112.
Administrative History: New rules filed November 7, 2024; effective February 5, 2025.

Tenn. Comp. R. & Regs. 0600-15-.04 PROCEDURES FOR PUBLIC COMMENT AT MEETINGS

(1) Written notification to request to make public comment at a Meeting must be sent to and received by the Executive Secretary of the Board at least two business days in advance of the Meeting. Requests may be made by email to sb.web@cot.tn.gov. The request should include the proposed speaker’s name, the agenda item(s) upon which the speaker wishes to comment, and whether the speaker’s comments will be in favor of or opposed to the agenda item(s).

Speakers will be selected on a first-come, first-served basis.

February, 2025 2 (2) The public comment period will be held at the beginning of the Meeting once the Meeting is called to order and a quorum has been established.

(3) Speakers will be limited to three minutes per person per agenda item, with a maximum of two speakers in favor of and two speakers opposed to each agenda item.

(4) Speakers must identify themselves at the beginning of their allotted time and stay on topic of the agenda item(s) that they have indicated their desire to speak on when addressing the Board.

(5) Speakers should conduct themselves in a respectful manner and will be asked to remove themselves if they engage in threatening or disruptive behavior.

(6) The Board, in its discretion, may ask relevant questions of any speakers providing public comment. Such a question period will not be included in the speaker’s allotted time frame.

(7) The Chair may extend the allotted time frame or increase the maximum number of speakers for a particular agenda item if the Chair determines that the circumstances reasonably require it. If the Chair extends the allotted time frame or total number of speakers, the Chair shall ensure that an equal extension is granted to both those in favor of and opposed to any agenda item subject to an extension.

History

Authority: T.C.A. § 8-44-112.
Administrative History: New rules filed November 7, 2024; effective February 5, 2025.