SB 771 (HB 733) — Taxes, Ad Valorem — Tennessee, 114th General Assembly
Overview
- Topic: Property tax appeals for industrial and commercial real property and tangible personal property.
- Core change: Allows a taxpayer or owner to appeal directly to the State Board of Equalization (SBE) without obtaining the assessor’s consent, removing the current requirement for consent before direct appeals.
- Effective date: Upon becoming law.
Key Provisions
1) Direct appeals to the State Board of Equalization (SBE)
- Amends TCA § 67-5-1412(b)(2):
- A taxpayer/owner may appeal the valuation of industrial and commercial real property and tangible personal property either to the local board of equalization or directly to the SBE.
- If appealing directly to the SBE, the appeal must be filed before August 1 of the tax year.
- The appeal must indicate that it is a direct appeal to the SBE.
- Before this bill, direct appeals required consent or concurrence from the local assessor. The bill removes that requirement.
2) Notice and administration if a portion is disputed
- Amends TCA § 67-5-1512(b)(3):
- If the full tax due is paid and the collecting official declines to accept the disputed portion, the official must send written notice within seven calendar days by registered or certified mail, explaining the reason for the decline.
- If the official fails to send the required notice within seven days, the official must accept the disputed portion tendered by the taxpayer.
- Any disputed portion declined is not delinquent while an appeal is pending at the county or state boards of equalization.
3) Interest on disputed amounts during appeal
- Amends TCA § 67-5-1512(c):
- If the collecting official declines to accept the disputed portion, interest shall not accrue on the disputed portion from the delinquency date until 30 days after issuance of the final assessment certificate by the SBE and until the undisputed portion is paid.
4) Effective date
- The act takes effect upon becoming law.
Fiscal and Administrative Impact (as summarized by fiscal note)
- State government: Revenue impact to the State Board of Equalization (SBE) estimated at more than $3 million in FY25-26 and subsequent years.
- Local governments: Precise impact uncertain; expectations that some cases will shift from local boards to the SBE, potentially reducing local board activity. Filing fees:
- SBE filing fee for appeals: $10 per appeal.
- The bill could increase direct appeals to the SBE by at least 10%, increasing revenue to the SBE.
- SBE workload and expenditures: No significant increase expected in hearing expenditures; SBE is currently staffed to handle appeals with administrative judges.
- Local consequences: Potential reduction in local board of equalization (LBE) activity; most LBEs do not charge an appeal fee, so local revenue impact is expected to be minimal and not significant. Some counties may see shorter or fewer LBE meetings.
Who is affected
- Property owners of industrial and commercial real property and tangible personal property in Tennessee who wish to appeal property valuations.
- Local assessors and collecting officials (administrative role in processing disputes and notices).
- State Board of Equalization (increased direct appeal workload and related filing fees).
Notes for readers
- The bill aligns Tennessee with a more direct access mechanism to the SBE for certain property tax appeals, potentially expediting or broadening the avenue for challenging assessments without assessor consent.
- Timelines: Direct SBE appeals must be filed by August 1 of the tax year.
- Financial implications: Increased SBE revenue from filing fees; broader shift of appeal activity from local LBEs to the SBE may affect local government processes and scheduling.
