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Caruthers Property Tax Letter
Article 17. What a Difference a Word Makes!
In 2007, the Assessors and the Division of Property Assessments introduced legislation to add a single word to the statutes regarding filing a Tangible Personal Property Return.
That one word was “timely”.
The word “timely” was inserted before the word “filed” in the statute requiring taxpayers to file tangible personal property schedules. The language of the statute now requires taxpayers to file the schedules on or before March 1 of each year, which has new adverse consequences for the taxpayers if not filed in accordance with statutory requirements.
Should a taxpayer file after March 1, the procedure is for the county board of equalization to accept the schedule and value the property in the same manner as the timely filed schedules. The taxpayer typically has until June to file these late schedules with the county boards.
Here are the new effects of the change if the schedule is not filed on or before March 1:
- If a taxpayer files timely before March 1, a taxpayer may correct errors made by filing an amended schedule by September 1 of the following year. If the schedule is filed after March 1, the taxpayer may not file an amended schedule at all and no errors may be corrected. If the errors are discovered after the county board deadline in June, there is no way for corrections to be made and for the taxpayer to receive a refund of the erroneous taxes.
- If the Assessor of Property makes an audit of a “timely” filed schedule, the Assessor is limited to basically auditing only one back year. If the schedule is not filed "timely", the Assessor may audit and increase assessments for up to three back years. This is a major financial change against the taxpayers.
- Assessments resulting from “timely” filed schedules are eligible for automatic application of the appraisal ratio. The appraisal ratio is a percentage calculated by the State for each county based upon a comparison of sale prices of real estate compared to the Assessor’s appraisals. For example, in Nashville for 2008, the appraisal ratio was .8380. In Shelby County the ratio was .9330. Therefore, the assessment and taxes resulting from a timely filed schedule received an automatic reduction of 16.2% in Davidson County and 6.7% in Shelby County. If the schedule is filed even one day late, the taxpayer does not receive these reductions.
All these new enactments simply amount to hidden tax increases, ways to trap the taxpayer into no way to escape erroneous assessments and taxes, and ways to gain more tax dollars from audits.
Also, unfair to the taxpayers, no extensions for filing the schedules are available to the taxpayers in order that they may avoid these harsh hidden tax increases and tremendous loss of rights which can cost huge unjust tax dollars. The filing date of March 1 if very early compared to most states and most states do allow extensions to file without penalties. You won't find that fairness in Tennessee.
In addition, unbelievably, taxpayers who do not file tangible personal property schedules at all may be better off than those who file after the deadline of March 1 and technically filed with the county boards of equalization which meets in June.
Under a separate bill this year, the Legislature approved to permit those taxpayers who failed to file any schedules at all for up to two years and received forced assessments to file the very late schedules and if the assessments were excessive, the assessments are adjusted and refunds issued less a penalty of 25% of the reduction in taxes. Refunds, less penalties, are also available to these type taxpayers if the forced assessees are audited and the assessments are found excessive.
However, the penalty for those taxpayers who actually filed schedules, but filed them after March 1 with the county boards of equalization, suffer penalties of 100% because no amended returns may be filed if mistakes were made in filing and if audited and found to be overassessed, those taxpayers are not eligible for any refunds.
Through continuing to file inconsistent hidden tax seeking legislation, the Assessors and the State agencies have created a very unfair tangible personal property assessment system in Tennessee.
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