Corporations Shift Their Property Tax Burden to the Poor and Middle Class

May 31, 2022 at 12:52 pm by robmtchl

Expensive properties—such as apartment buildings, warehouses, or home improvement centers—typically see property values increase by a smaller margin than the median value increase in a local community's revaluation year. 

Because their percentage increase is less than the median increase, their property taxes drop even though their property is worth more. The single-family homes in less affluent areas of the community—whose values increased greater than the median—will pay more in property taxes. It's based on demand in the market.

This is the equalization process. It is a fair process until well-to-do property owners abuse the legal process. These property owners have the means to hire legal firms to appeal their equalized values. Legal firms working on behalf of such clients can appeal values on property, which can reduce the property taxes paid as a result of the equalization process. 

In most cases, these firms have the means to overwhelm the underfunded local assessors’ offices. This results in a greater shift in the real tax burden onto the backs of middle and lower income families in a community.

Some of these families may be employees or clients of these businesses seeking excessive relief. This causes a financial burden on those families which impacts their discretionary income. That shrinking of their family spending power may impact decisions they make about where and how they spend their hard earned money. That financial stress impacts every retailer's bottom line. It impacts a community’s fiscal well-being too.

Property taxes are a minuscule expense on the bottom line of large corporations.

However, it is a major source of revenue for local communities in Tennessee. It is Tennessee’s primary funding source for local education. The only parties who really benefit from appeals of big box retailers' property values are the attorneys and tax representatives. Hundreds of thousands of dollars have already been spent in Tennessee to further lower property taxes on properties that already had their taxes lowered.

The now reduced tax dollars—which were spent by Tennessee communities to defend the equalized property values on large properties—could go to better causes. For instance, these tax dollars could be spent on education or improving the local police forces.

While greed may be legal most of us agree in this case it's amoral. I believe most corporations are unaware of what is going on and of its very real negative impact on our communities. The appeal processes were established to correct real errors and address inequities in property valuations. What is happening now is a legal distortion of justice and it is hurting their customers and our communities. It seems that tax reps and greedy corporations not only want more... They want it all!