By Rob Mitchell [Special to The Tennessee Conservative] –
Tennessee should remain ever vigilant in her finances. As there is an ever increasing push to expand government services there will be an attempt to find ways to fund them.
It is well known that except for the Hall tax, Tennessee has no income tax (which was removed by amending the State Constitution). Since 1946 Tennessee has relied on the sales tax as her primary source of funding. Prior to 1946 the State also relied on a property tax.
The state property tax went away (sort of) but not the empowering legislation that makes it so potentially dangerous. With the simple stroke of a legislative pen it could once again be set into motion.
TCA 67-5-101 states “All property, real and personal, shall be assessed for taxation for state, county and municipal purposes, except such as is declared exempt in part 2 of this chapter, or unless otherwise provided.”
It is there in black and white. Words mean things. Just because you don’t use your kitchen dishwasher does not mean you don’t have a dishwasher in your house! You could use it at any time when the burden of washing dishes by hand becomes too onerous.
It is the same without state finances. At ANY time the legislature could vote to levy a tax! Probably by saying “it’s for our children” or ”we need it to fund healthcare”.
You may say this can never happen. We almost had a State Property tax again. Remember when the Legislature was considering a State Income Tax? That was not the first choice. The first choice was to levy the State Property Tax again but former Governor Don Sundquist caved to well-heeled monied property owners who knew it would be easier for them to skirt paying their fair share of income taxes because accountants could shield their wealth through accounting tricks. The State Property Tax would not afford them the same ability to not pay what they owed. So they pushed the income tax instead.
How do we solve this for the future?
The quick fix is to change the Tennessee Code Annotated removing the inclusion of the word “state” from the property tax provision. A long term fix will require an amendment to the state constitution and an outright prohibition.
The time to act on this is sooner rather than later. Article II Section 28 of the Tennessee defines that “all” property (real, tangible and intangible personal property and mixed properties) be subject to taxation.
As the Property Assessor of Rutherford County I understand what a drain this would be on the hardworking citizens of one of the nation’s fastest growing communities. I hope you will assist us in making more citizens aware of this.
Current Legislation You Should Be Aware of:
House Bill 1209 (HB1209), sponsored by Speaker Cameron Sexton (R – Crossville – District 25) and companion bill Senate Bill 1192 (SB1192), sponsored by Lt. Gov. Randy McNally (R – Oak Ridge – District 5)
An amendment to HB1209 (not visible on the General Assembly website) creates a legislative study to recommend specific legislation for 2024. This study committee will include 5 House and 5 Senate members and will be focused on determining if Proposition 13 in California should be brought to Tennessee, as well as, discussing capping local property tax increases and implementing a statewide property tax. The Speakers of the House and Senate are proposing this study.
HB1209 has been placed on the House Local Government Committee calendar for March 28th.
SB1192 has been “General Subbed” which should mean the legislation is dead for this session. However, the fact this legislation was presented in the first place gives cause for concern.