Frequently Asked Questions
Components of the Property Tax
Property taxes in Tennessee are calculated utilizing the following four components:
- TAX RATE
The APPRAISED VALUE for each taxable property in a county is determined by the county property assessor. This amount is an estimate of market value based on an established set of tables, manuals, and procedures mandated by state statute, and is intended to provide an equal treatment of all properties in the jurisdiction for tax purposes.
The ASSESSMENT RATIO for each different class of property is established by Tenn. Constitution, Art.2, § 28 and TCA 67-5-801 state law as follows:
Residential / Farm
Commercial / Industrial
Tangible Personal Property
Commercial / Industrial
The ASSESSED VALUE is calculated by multiplying the appraised value by the assessment ratio.
The TAX RATE for each county and municipality is set by the County Commission or the City Council based on the amount of monies budgeted to fund the provided services. These tax rates vary depending on the level of services provided and the total value of the county’s tax base.
Calculating Your Property Taxes
The example below is for a typical residential property with an Appraised Value of :
and the most recent Tipton County Tax Rate :
$ 2.04 per $100 of assessed value or .0204
Multiply the Appraised Value times the Assessment Ratio
$ 80,000 X 25 % = $ 20,000
This gives you the property’s Assessment Value
Multiply the Assessment Value times the Tax Rate
$ 20,000 X (2.04/100) = $ 408
$ 20,000 X .0204 = $ 408
This gives you the amount of the county property tax bill for this particular property.
If your property is also in the city, follow the same steps, using the city tax rate to figure your city property tax bill.
The billing amount you receive on your actual tax bills may vary slightly based on the method used for rounding.
Note: The tax rates for the current tax year are established by the County Commission and City Council in July of that year. The best possible estimate of taxes made between January 1st and July is done by utilizing the tax rates from the previous year.
Any property owner who believes that the classification or value assigned to their property by the Assessor of Property is incorrect has the right to appeal that assessment and be heard regarding their opinion of value. Many times a phone call or visit to the Assessor’s Office can clear up administrative errors or answer questions an owner may have about how the value was developed. If after discussing the complaint with the Assessor of Property, a property owner wishes to file a formal appeal of their property assessment, the County Board of Equalization is the next step in that process.
County Board of Equalization
The County Board of Equalization is the first level of administrative appeal for complaints regarding the assessment, classification, and valuation of property for tax purposes. It consists of five (5) property owners selected from different parts of the county to serve two year terms. Because of Covington’s population, Tennessee law requires one (1) member of the Tipton County’s board to be a Covington resident appointed by the city council. The board’s duties include examining and equalizing county property assessments, ensuring that all taxable properties are included on the assessment rolls, eliminating exempt properties from taxation, hearing complaints from property owners/taxpayers, decreasing values of over-assessed property, increasing values of under-assessed property, and correcting clerical mistakes.
The County Board of Equalization meets beginning the 1st day of June each year and remains in session until that year’s equalization is complete. Approximately ten days prior to the board convening, the Assessor of Property will publish a public notice in the local newspaper detailing the dates, time, and place the board will be meeting to hear appeals. The procedure for property owners to make an appointment will also be stated in the notice, but normally consists of making a request by phone or in person at the Assessor’s office during the last week of May or the first week of June.
As a property owner, you have the right to appear in person, or have a family member, attorney or duly authorized agent appear on your behalf. You should bring any appraisals, receipts, comparable property assessments or other documents that support your theory of the property’s value. You also have the right to bring witnesses who can provide relevant information about your property. However, any evidence you present should refrain from discussing the property taxes or your ability to pay them, as the board is exclusively concerned with fair and equitable property values.
After hearing all of the evidence, the board will make a decision as soon as possible and results will be mailed to the property owner. This normally occurs prior to the end of June. If the property owner is still not satisfied with the decision of the county board, the next step is to carry the appeal to the State Board of Equalization. The decision letter from county board will contain directions on how to file an appeal with the State Board of Equalization. By law that appeal must be made prior to 1 August or 45 Days after the County Board’s letter is mailed, whichever is later.
Usually the amount a property is taxed is based on what the property is worth on the market. The Agricultural, Forest, and Open Space Land Act of 1976, better known as the Greenbelt Law, allows certain land to be taxed on its present use instead. The law is designed to preserve farm and forest land for valuable food and fiber and to maintain open space for public enjoyment by easing some of the burden of property taxes. To qualify, property must meet certain criteria such as land type, size minimums, use, and income produced from farming.
There are 3 types of land which may qualify for greenbelt classification: agricultural, forestry and open space land.
"Agricultural" land is land which is part of a farm "engaged in the production or growing of crops, plants, animals, nursery, or floral products." The property may include some areas which don't produce farm products (such as woodland and wasteland). It may also include a homesite for the owner or operator, which is assessed at market value, not use value. The tract of land must contain at least 15 acres to qualify. A parcel of property that is at least 10 acres, but less than 15 acres, can qualify for enrollment if the owner has other property in the program that is fully qualified. To qualify for greenbelt, farm property must produce a gross farm income of at least $1,500 per year on average over any three years it is classified as greenbelt. Property may also qualify if you, your parent, or your spouse have farmed the property for at least 25 years, you continue to live on the property , and it is not used for any purpose inconsistent with farming.
"Forest" land is property of 15 acres or more used in the growing of trees "under a sound program of sustained yield management" or containing an amount or quality of tree growth, which is managed like a forest. Although forest property does not have to produce a specific income to be considered for greenbelt, a forestry plan detailing the acreage, the amount and type of timber, actual and potential growth rates, and proposed management practices to be applied to the land, must be developed and filed as part of enrollment.
"Open Space" land is property of at least 3 acres maintained in an open or natural condition. This type of property benefits the public because it conserves natural resources, provides a natural setting for people who might not otherwise have access to such a place, and provides "relief from the monotony of urban sprawl." Requirements for qualification of open space land include a plan for preservation approved by state or local planning agencies, or the execution of a perpetual open space easement.
The law limits the amount of property which can be qualified for greenbelt to 1,500 acres per owner per county. If an owner owns property with others or as part of a corporation, partnership, etc., each owner is credited with their proportionate share of the acreage towards that limit.
When a property that has been assessed as Greenbelt becomes disqualified for any of the following reasons:
size of tract or use no longer meet qualifications
the owner requests in writing to withdraw
the property is covered by a recorded subdivision plat, unless the owner can still prove farm use
- property is sold and converted to other use
The owner may be liable to pay what are referred to as “rollback” taxes on the property. “Rollback” is simply the difference between the Greenbelt assessment and the market value assessment that would have been applied if the property had not been in the program. In effect, it is paying back the tax savings the owner enjoyed under greenbelt. For Agricultural and Forest properties the rollback period is 3 years (the current year and the 2 preceding years), for Open Space property the rollback is 5 years. If only a portion of the property is sold or converted to a non-qualifying use, rollback is only assessed on that portion, as long as the remainder of the property still qualifies. An owner should fully understand “rollback” before applying for the Greenbelt program.
Owners of properties that meet the criteria for enrollment in the Greenbelt Program can fill out the application, have it approved, notarized, and recorded (recording takes place in the Register of Deeds located in the same building) all in one short visit. To be effective for the current tax year, the application process must be completed no later than 1 March.
For more information on the greenbelt application procedures and your rights and responsibilities as a greenbelt owner please contact the Assessor of Property.