For those counties that have completed their reappraisals, a newly calculated certified tax rate (CTR) is on the horizon. Certified tax rates ensure that the reappraisal process remains revenue neutral and the equalization of value generates the same amount of property tax that was levied in the year before the reappraisal. (Note: New construction is added back after the CTR is calculated). As seen below, the calculation is defined by statute and explains what can and cannot be included in the CTR.
Governing bodies also have the authority to levy a tax in excess of the CTR if certain requirements are met. Those requirements include placing an advertisement in a local newspaper of general circulation, the county executive/mayor providing notice to the state board of equalization, and holding a public hearing.
TCA § 67-5-1701. General provisions.
(a)(1) Upon a general reappraisal of property as determined by the state board of equalization, the county assessor of property shall certify to the governing bodies of the county and of each municipality within the county the total assessed value of taxable property within the jurisdiction of each governing body.
(2) The assessor shall also furnish each governing body an estimate of the total assessed value of all new construction and improvements not included on the previous assessment roll and the assessed value of deletions from the previous assessment roll.
(3) Exclusive of such new construction, improvements and deletions, each governing body, in the event of a general reappraisal as determined by the state board, shall determine and certify a tax rate which will provide the same ad valorem revenue for that jurisdiction as was levied during the previous year.
(4) For the purpose of calculating the certified rate, the governing body shall use the taxable value appearing on the roll exclusive of taxable value of properties appearing for the first time on the assessment roll. The governing body may also exclude from the taxable value appearing on the roll:
(A) The taxable value of properties subject to tax increment financing provisions adopted by the governing body pursuant to title 13, chapter 20, part 2; and
TCA § 67-5-1702. Levy in excess of certified rate.
No tax rate in excess of the certified tax rate as provided for in § 67-5-1701 shall be levied by the governing body of any county or of any municipality until a resolution or ordinance has been approved by the governing body according to the following procedure:
(1) The governing body shall advertise its intent to exceed the certified tax rate in a newspaper of general circulation in the county, and the chief executive officer of the county or municipality, as appropriate, shall within thirty (30) days after publication furnish to the state board of equalization an affidavit of publication; and
(2) The governing body, after public hearing, may adopt a resolution or ordinance levying a tax rate in excess of the certified tax rate.