There is often confusion among taxpayers regarding Tennessee’s “truthful tax” and “certified tax rate” laws.
Laws require appraisers to certify the “full assessed value” of taxable property, new construction and improvements not shown on the previous tax roll and removals from the tax roll in jurisdiction to the governing body of jurisdiction.
The legislature must then “certify” a tax rate that will provide the same property tax revenue for that jurisdiction as that which was levied in the previous year. In other words, if total contributions go up, the tax rate must go down.
This provision leads many taxpayers to mistakenly believe that the aggregate property tax cannot increase. Unfortunately for taxpayers, these laws do not prevent a tax jurisdiction from increasing both the tax rate and contributions in the same year.
The legal exception that makes this “double dip” possible provides that any governing body can levy a higher tax rate as long as it:
1. Announces its intention to exceed the certified rate in a newspaper, and
2. Pass a resolution levying a higher tax rate than the certified tax rate.
Tax jurisdictions can increase tax rates and contributions in the same year if they tell you they are going to do so. They can even lower the tax rate while keeping it above the revenue neutral “certified” rate.
The puzzling nuance is the difference between tax rates and tax burden. This is permitted by law despite the potential windfall for government and hardship for taxpayers.