Tenn. Comp. R. & Regs. 0600-13-.05

Current through December 18, 2024

Section 0600-13-.05 - DETERMINING CERTIFIED AND EQUALIZED TAX RATES

The first step is to determine the type of calculation needed: 1) Certified tax rate; or 2) Equalized tax rate.

(1) Certified tax rate:

(a) The first step is to set a pro forma current year tax base for the jurisdiction by removing new property from the locally assessed property tax base and then adding estimated centrally assessed property.

(b) The second step is to determine the preceding year's property tax levy.

(c) The third step is to determine the certified tax rate. Divide the preceding year's property tax levy by the pro forma current year tax base and multiply by 100.

EXAMPLE

A city's preceding year tax levy is $14,352,424, and the pro forma current year tax base is $723,120,031. The following is an example of the calculation:

$14,352,424/723,120,031*100 = $1.9848 (Certified tax rate)

(2) Equalized Tax Rate:

(a) The first step is to fix a pro forma equalized current year tax base for the city by removing new property from the locally assessed tax base and then adding the estimated centrally assessed property for the part of the city lying in each county.

(b) The second step is to determine the preceding year property tax levy for each part of the city lying in different counties. These numbers from each part of the city are added together to arrive at the total preceding year property tax levy used in the fourth step.

(c) The third step is to determine the current year's equalized adjusted assessment for each part of the city by dividing the adjusted current year total assessment in each part of the city by the current year's approved appraisal ratio. These numbers are added together to arrive at the total equalized adjusted assessment used in the fourth step.

EXAMPLE

A city's current year adjusted assessment is $3,934,948 for JUR 1 and $1,545,591 for JUR 2, and the current year appraisal ratio is 1.0000 for JUR 1 and .8200 for JUR 2. The following is an example of the calculation:

JUR 1 - Adjusted Assmt.	$3,934,948	Appraisal Ratio	1.0000
JUR 2 - Adjusted Assmt.	$1,545,591	Appraisal Ratio	.8200

JUR 1 - $3,934,948/1.0000 = $3,934,948 (current year equalized adjusted assmt.)

JUR 2 - $1,545,591/.8200 = $1,884,867 (current year equalized adjusted assmt.)

Add JUR 1 and JUR 2 equalized adjusted assmt.:

$3,934,948

$1,884,867

$5,819,815 (Total current year equalized adjusted assmt.)

(d) The fourth step is to determine an overall equalized tax rate by dividing the total equalized adjusted assessment by the total preceding year property tax levy times 100.

EXAMPLE

A city's total preceding year property tax levy is $44,636, and the total current year equalized adjusted assessment is $5,819,815. The following is an example of the calculation:

JUR 1 - Preceding Year Tax Levy	$30,062	Equalized Adjusted Assmt.	$3,934,948
JUR 2 - Preceding Year Tax Levy	$14,574	Equalized Adjusted Assmt.	$1,884,867
TOTAL:	$44,636	TOTAL:	$5,819,815

$44,636/$5,819,815*100 = $0.7670 (Overall Estimated Tax Rate)

(e) The fifth step is to determine the equalized tax rate for the part of the city lying in each county by dividing the overall equalized tax rate by the approved current year appraisal ratio for each county.

EXAMPLE

A city's overall equalized tax rate is $0.7670. The current year appraisal ratio for JUR 1 is 1.0000 and .8200 for JUR2. The following is an example of the calculation:

JUR 1 - $0.7670/1.0000 = $0.7670 (current year equalized tax rate)

JUR 2 - $0.7670/.8200 = $0.9353 (current year equalized tax rate)

Tenn. Comp. R. & Regs. 0600-13-.05

Original rules filed April 1, 2020; effective 6/30/2020.

Authority: T.C.A. §§ 4-3-5103, 67-1-305, and 67-5-1601.