Murfreesboro FAQ: Does MTSU pay property taxes?

Mar 05, 2020 at 03:52 pm by Michelle Willard

MTSU entrance

Because MTSU is a government property, it is exempt from paying property taxes.

State law "governs exemption of property of any educational institution owned, operated, or controlled by the State of Tennessee," said Emily Bennett, Senior Tax Counsel, Comptroller of the Treasury.

Specifically, the Tennessee Code Annotated (TCA 67-5-203) says "All property of any educational institution owned, operated or otherwise controlled by the state of Tennessee as trustee, or otherwise, shall be exempt from taxation."

That means Middle Tennessee State University is not required to pay any state or local property taxes, even on residential rental property it owns.

Property Assessor Rob Mitchell said the law has been challenged several times and the courts have upheld the statute. They have even applied it to private institutions.

"I even went back to a court case from the late 1800s with Sewanee," Mitchell said, adding another case involving the University of Memphis found in favor of the university.

That means the law applies to all universities in the state, Vanderbilt, Belmont, Lipscomb, etc.

"It is no possible way to assess anything legally and to attempt it would be a waste of valuable resources and tax dollars on a futile pursuit," he said.

The only way MTSU would be required to pay taxes is if the property were owned by a foundation established by the university and the board of trustees does not have control of it, Bennett said.

Other communities have come up with a compromise, though, Mitchell said.

He found that in other states property assessors will send "bills" to publicly owned properties that give an estimate of how much tax would be owed if they were required to pay it. A few institutions have chosen to be good community partners and paid a portion of the liability.



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