For purposes of taxation, property is divided into three classes: real property,
tangible personal property and intangible personal property. Taxes levied on property
are a primary source of revenue for county government.
Real property is land parcels and any structures or improvements thereon. Movable
structures such as house trailers and mobile homes are improvements to the land
and are considered real property. Real property is classified by the Tennessee Constitution
into sub-classifications to be assessed as follows:
Industrial and Commercial Property assessed at 40 percent of value,
and includes residential buildings with two or more rental units;
Residential Property assessed at 25 percent of value; and
Farm Property assessed at 25 percent of value. The Agricultural,
Forest and Open Space Land Act provides for the assessment and taxation of farm,
forest, and open space land at its current use value rather that at its market value.
Tennessee's Green Belt Law is intended to protect farm and other "green
belts" of land, particularly in urban areas, from pressures toward other use.
Certain properties, e.g. owned by government, housing authorities, some non-profit
organizations, and cemeteries are exempt from taxation.
Tangible Personal Property
Tangible personal property includes automobiles and commercial inventories and equipment;
all items that may be seen, weighed, measured, felt or touched, or are perceptible
to the senses, except real property. The Tennessee Constitution sub-classifies tangible
personal property as follows:
Public Utility Property assessed at 55 percent of value; except,
by federal court decision, the railroads, the trucking and airline industries;
Industrial and Commercial Property assessed at 30 percent of value.
Ad valorem taxes on merchants' inventories and equipment were exempted by Tennessee
statute in 1972 and later by constitutional amendment.
Intangible Personal Property
Intangible Personal Property are assets such as cash, stocks and bonds. Income from
investments in stocks, bonds, notes, money markets, and bank accounts, except that
generated within the state of Tennessee and declared exempt, is taxed at rates set
by the General Assembly and collected by the state as the (Hall) income tax.
Every two years, the State Division Of Property Assessments conducts an appraisal
ratio study statewide. The purpose of the study is to determine the general relationship
of recorded value to market value within and between counties, The assessments of
public utility property are equalized to reflect the median of property tax appraisal
within a county.