With the recent decline in real estate values, as well as county-wide reappraisals occurring in Maury County, Rutherford County and other Tennessee counties, it is important for property owners to keep an eye on the value assigned to their business real estate. Business owners who feel they are paying an inflated amount of real property tax have the right to appeal the valuation.

In Tennessee, the real property tax system is coordinated by county officials, with oversight by the State Board of Equalization. Local county assessors appraise the value of all real property in Tennessee counties every four to six years. Once the value is determined, it remains constant until the next reappraisal year unless there are substantial changes to the property in the interim. Rutherford County and Maury County are currently in a reappraisal year for 2010. Davidson County and Sumner County were reappraised in 2009. Williamson County and Wilson County will be in a reappraisal year in 2011.

Business owners who believe that the appraised value of their property is overstated—whether by reappraisal or due to decreases in value from the declining real estate market, may challenge the valuation through their county board of equalization. The formal appeal process is similar in all counties, with some counties offering an informal opportunity to contest the new value. For property owners in the majority of Tennessee counties, however, the only way to seek property tax relief is to file a formal appeal with the County Board of Equalization. The general timeline of tax notification and appeal process is as follows:

  • Notices of assessment or classification change are sent to taxpayers on March 1 of each year.
  • Taxpayers disputing a classification or valuation may appeal to the County Board of Equalization, which typically convenes beginning on June 1.
  • Unfavorable County Board decisions may be appealed to the to the State Board of Equalization.
  • All matters passed on by the State Board or Assessment Appeals Commission are subject to judicial review.

Stringent deadlines apply in the appeals process, which must be closely monitored. It is advisable that taxpayers unfamiliar with the appeals process seek professional assistance to prepare an appeal and ensure compliance with procedural deadlines. County Assessors in Maury County and Rutherford County, as well as any other Tennessee county conducting a reappraisal for 2010, are in the process of mailing reappraisal notices which will state the appraised fair market value of commercial properties for 2010. Every commercial property reappraisal should be reviewed to determine if it makes sense to contest the value.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.