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Caruthers Property Tax Letter
Article 14. Another New Penalty for Personal Property Taxpayers
The State has recently passed yet another penalty for taxpayers who do not file tangible personal property schedules with the Assessor's office on or before March 1.
The new legislation takes application of the equalization factor away from taxpayers who file even one day past the March 1 deadline. A taxpayer may file the schedule after March 1, but the schedules have to be approved by the county board of equalization which usually meets in June.
Prior to this new law, all assessments from made from schedules filed by taxpayers, whether filed with the assessors or the county boards of equalization, were “equalized” by applying the State computed appraisal ratio factor for each county. The State computes these factors every two years by comparing sales of properties to an assessor’s appraisals. You may view the 2008 factors for all the counties by clicking here.
For example, in 2008 the appraisal ratio in Shelby County was .9330 and in Davidson County it was .8780. For those personal property taxpayers who filed a schedule with the assessors or the county boards of equalization, their assessments were multiplied by these factors and resulted in a reduction in assessments and taxes. In Shelby County, the taxpayer saved 6.7% in actual reduced taxes. In Davidson County, the taxpayer saved 12.20% in actual reduced taxes.
Taxpayers who are too busy or forget to file by March 1st with the assessors, but did actually file the schedule later with the county boards of equalization. will lose those significant tax savings. This is the same treatment that those taxpayers receive who never file schedules.
This refusal to apply the equalization factor to taxpayers who filed a late schedule is the same for non-filers, people who refused to even file a schedule. One of the problems the State may encounter in applying this new legisltion is that if it is actually determined to be a penalty, it is not uniform throughout the State, or even within the same county when refused to both filers of schedules and non-filers, and may run into some State Constitutional problems.
The promoters of such legislation, State and local agencies, often don't think how legislation really impacts the taxpayers in fairness and equality. Most lawmakers never even knew they were voting for this penalty because it was a very small part of a bill dealing mainly with forced assessments.
This new penalty comes on top of a another new penalty placed upon tangible personal property taxpayers in 2008. In the previous legislative session, the State was successful in enacting legislation that prevented a taxpayer, who did not file the schedule by March 1 with the Assessor but filed later with the board of equalization, from ever being permitted to file an amended schedule and correcting any errors the taxpayer may have made in filing the schedule. This is very unfair to hold a taxpayer to errors and overpayments forever because the taxpayer may have filed a schedule late. No law should hold taxpayers to overpay due to errors if only a small time has passed. We know of no other taxing agencies (IRS,State Franchise & Excise, Hall Tax) that will not permit taxpayers to correct errors in their returns, even if filed late
Taxpayers should be aware of the unique ways that increased taxes are being added to their local property tax bills each year even though their assessments or tax rates are not increased.
If you are interested in protesting to the sponsors of this legislation for allowing such legislation to be passed, below are their names, telephones, and emails.
One day your company may just feel the pain because of these thoughtless enactments.
Bill Sponsors
Senate Doug Overbey (615) 741-0981 sen.doug.overbey@capitol.tn.gov
House Craig Fitzhugh (615) 741-2134 rep.craig.fitzhugh@capitol.tn.gov
Any questions, email us at tax@caruthersinc.com.
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