Murfreesboro FAQ: The confusion between Truth in Taxation and the Certified Tax Rate

Jul 23, 2020 at 08:00 am by robmtchl

There is often confusion among taxpayers surrounding Tennessee's "Truth in Taxation" statutes and the "certified tax rate." 

The statutes require assessors to certify the "total assessed value" of taxable property, new construction and improvements not on the previous tax roll and deletions from the tax roll within the jurisdiction to the governing body of the jurisdiction.

The legislative body must then "certify" a tax rate which will provide the same property tax revenue for that jurisdiction as was levied during the previous year. In other words, if total assessments go up, the tax rate must come down.

This provision leads many taxpayers to mistakenly believe that overall property taxes cannot increase. Unfortunately for taxpayers, these statutes do not prevent a taxing jurisdiction's ability to increase both the tax rate and assessments in the same year.

The statutory exception that makes this "double-dip" possible provides that any governing body may levy a greater tax rate so long as it:
1. Advertises its intent to exceed the certified rate in a newspaper, and
2. Adopts a resolution levying a tax rate in excess of the certified tax rate.

Taxing jurisdictions may raise tax rates and assessments in the same year if they tell you they are going to do it. They can even lower the tax rate but keep it higher than the revenue neutral "certified" rate.

The confusing nuance is the difference between tax rates and tax burden. This is authorized by law despite the potential windfall to the government and hardship on the taxpayers.

Sections: Murfreesboro