Not later that February 1 each year, the Assessor of Property is required to furnish each applicable business in the county with a Schedule B for listing all of their tangible personal property. Those business owners (or agents) must then complete and return those forms to the assessor's office on or before March 1.
For many existing businesses, this simply involves listing the equipment acquired or disposed of during the previous year, so that it may be added to or removed from the schedule already on file. It is basically a "self declaring" system, which is subject to audit for verification.
Unlike the system for assessing real property where the appraisal is based on fair market value and equalized across the entire jurisdiction, the appraisal of personal property is based on the actual cost of the property less depreciation. Personal property is categorized in 10 groups for reporting. Each of those groups has its own depreciation schedule that is outlined in state statutes.
In Tennessee, leased personal property used by a business is assessed to the lessee (user) and must also be reported on a company's reporting schedule. For smaller accounts, the system allows an alternate method for reporting personal property. If the depreciated value of the business's personal property is $1,000 or less, the owner can declare such in the reporting schedule and he/she does not have to itemize or report detailed costs. With this certification, subject to audit, the assessment will be set at $300.
Again, the deadline for filing Personal Property Reporting Schedules is March 1 each year. Failure to return the schedule by that date will result in a forced assessment of the business's personal property using information about the quantity and value of personal property held for use by businesses of similar size and function.
Intangible personal property is defined by statute to include "money, any evidence of debt owed to a taxpayer, any evidence of ownership in a corporation or other business organization having multiple owners, and all other forms of property whose value is expressed in terms of what the property represents rather than its own intrinsic worth." Included is all personal property not classified as tangible personal property. The assessment level is 40% for this classification.
The state constitution gives the legislature power to establish subclasses and assessed value percentages for intangible personal property, but currently the statutes impose the assessment only on intangible personal property of certain insurance companies, loan, investment and for-profit cemetery companies. Provisions for assessing bank intangible property were struck down by the U.S. Supreme Court in 1983 and an excise tax is now imposed in lieu of the property tax on intangible personal property of banks.
Reporting
The Davidson County Assessor's office provides two schedules for reporting intangible personalty. For Loan, Investment and For-profit Cemetery Companies a Tax Schedule "A" is provided by February 1 of each year to be completed, signed, notarized and returned to the Assessor's office by March 1. Certain Insurance companies are provided a Tax Schedule "D" to be completed and returned in the same manner.
View a copy of the Tax Schedule "A" for Loan, Investment, and Cemetery Companies.
View the TCA Statute for the Tax Schedule "A".
View a copy of the Tax Schedule "D" for Insurance companies.
View the TCA Statute for the Tax Schedule "D".
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As with "real property", a property owner has the right to appeal their personal property assessment, beginning with the Metro Board of Equalization and continuing until satisfied or appeals are exhausted. For the initial appeal to be heard, however, the taxpayer must first file a completed schedule.
For more information on tangible personal property, reporting procedures, and your rights and responsibilities as a property owner please contact our office.
To assist in the Informal Review, property owners should submit documentation that supports their opinion of the value of the property in question. Examples of such documentation include:- Sales prices of similar properties in the immediate area within the last three years.
- Recent private appraisal.
- Photos of the property.
- Any other information the property owner believes will assist appraisers in analyzing the property's market value.
The Assessor's Office will contact you regarding the results of their informal review .
For those property owners who disagree with the results of their informal review they may appeal to the Metro Board of Equalization, the appeals process is described below.
Here's the appeal process:
- Metro Board of Equalization (MBoE): The Board of Equalization is an independent body that meets beginning June 1. Failure to file an appeal could result in the assessment becoming final without further right of appeal.
- State Board of Equalization (SBoE): If property owners disagree with the Metro Board of Equalization's resolution, they may appeal to the SBoE, which meets as needed in Davidson County.
67-5-903. Schedules - Property used for business, professions, manufacturing
- All partnerships, corporations, other business associations not issuing stock and individuals operating for profit as a business or profession, including manufacturers, except those whose property is entirely assessable by the comptroller of the treasury, shall be furnished by the assessor not later than February 1 of each year, a schedule requiring the taxpayer to list in detail all tangible personal property owned by the taxpayer and used or held for use in such business or profession including, but not limited to, furniture, fixtures, machinery and equipment, all raw materials, supplies, but excluding all finished goods in the hands of the manufacturer and the inventories of merchandise held for sale or exchange, such schedule to be approved by the director of property assessments.
- It is the duty of the taxpayer to list fully such tangible personal property used, or held for use, in the taxpayer's business or profession on such schedule, including such other information relating thereto as may be required by the assessor, place its correct value thereon, sign same, and return it to the assessor prior to March 1 of each year. In lieu of detailing acquisition cost on the reporting schedule, the taxpayer may certify that the depreciated value of tangible personal property otherwise reportable on the form is one thousand dollars ($1,000) or less. The assessor shall accept the certification, subject to audit, and fix the value of tangible personal property assessable to the taxpayer pursuant to the schedule, at one thousand dollars ($1,000). This value shall be subject to equalization pursuant to § 67-5-1509. The certification stated on the schedule shall warn the taxpayer that it is made subject to penalties for perjury and subject to statutory penalty and costs if proven false.
- A taxpayer who fails, refuses or neglects to complete, sign and file such schedule with the assessor of property, as provided in subsection (b), commits a Class A misdemeanor, punishable by a fine of not less than fifty dollars ($50.00) nor more than five hundred dollars ($500), and the assessor shall assess the tangible personal property of the taxpayer which is used, or held for use, in the taxpayer's business or profession, and shall give the taxpayer notice of such assessment by United States mail, addressed to the last known address of the taxpayer, or the taxpayer's agent, at least five (5) calendar days before the local board of equalization commences its annual session.
- The remedy of a taxpayer against whom a forced assessment is made as provided in this section shall be the same as provided in § 67-5-1407, but such remedy shall be conditioned upon the taxpayer filing with the board of equalization a complete listing or schedule of all the tangible personal property owned or used by the taxpayer in the operation of the taxpayer's business on the same form as required to be filed with the assessor.
- The taxpayer may amend a personal property schedule previously filed with the assessor at any time until September 1 following the tax year. If the assessor agrees with the amended schedule, the assessor shall thereupon revise the assessment and certify the revised assessment to the trustee. If the assessor believes the assessment should be otherwise than claimed in the amended schedule, the assessor shall adjust the assessment and give written notice to the taxpayer of the adjusted assessment. The taxpayer may appeal the assessor's adjustment of or refusal to accept an amended assessment schedule to the local and state boards of equalization in the manner otherwise provided by law. Additional taxes due as the result of an amended schedule shall not be deemed delinquent until sixty (60) days after the date notice of the amended assessment was sent to the taxpayer. Amendment of a personal property schedule shall not be permitted once suit has been filed to collect delinquent taxes related to the original assessment.
- The schedule approved by the
director of property assessments and
supplied to taxpayers shall contain
schedules reflecting the following
rates of allowable depreciated cost
for the listed categories of
property, as well as spaces for
general data on the particular
taxpayer:
GROUP 1A - Vehicles (five-year life)
Year Cost on File Revised Cost Depr. ---------- ---------- ---------- ---------- 1 .80 2 .60 3 .40 4 .20 Prior .20 Total GROUP 1B (eight-year life)
GROUP 1 - Furniture, Fixtures, General Equipment, and All Other Property Not Listed in Another Group
Year Cost on file Revised Cost Depr. ---------- ---------- ---------- ---------- 1 .88 2 .75 3 .63 4 .50 5 .38 6 .25 7 .20 Prior GROUP 2 - Computers, Copiers, Peripherals, and Tools (three-year life)
Year Cost on File Revised Cost Depr. ---------- ---------- ---------- ---------- 1 .67 2 .33 Prior .20 Total GROUP 3 - Molds, Dies, and Jigs (four-year life)
Year Cost on File Revised Cost Depr. ---------- ---------- ---------- ---------- 1 .75 2 .50 3 .25 Prior .20 Total GROUP 4 - Aircraft, Boats and Towers (not classified as real property) (13-year life)
Year Cost on File Revised Cost Depr. ---------- ---------- ---------- ---------- 1 .92 2 .85 3 .77 4 .69 5 .62 6 .54 7 .46 8 .38 9 .31 10 .23 11 .20 Prior .20 Total nbsp; GROUP 5 - Manufacturing Machinery (eight-year life)
Year Cost on File Revised Cost Depr. ---------- ---------- ---------- ---------- 1 .88 2 .75 3 .63 4 .50 5 .38 6 .25 7 .20 Prior .20 Total GROUP 6 - Billboards, Tanks, and Pipelines (unless classified as real property) (16-year life)
Year Cost on File Revised Cost Depr. ---------- ---------- ---------- ---------- 1 .94 2 .88 3 .81 4 .75 5 .69 6 .63 7 .56 8 .50 9 .44 10 .38 11 .31 12 .25 13 .20 Prior .20 Total GROUP 7 - Scrap Property
Year Cost on File Revised Cost Depr. ---------- ---------- ---------- ---------- All .02 GROUP 8 - Raw Materials and Supplies
Cost on File Revised Cost Original Cost - (1) Tangible personal property
which the taxpayer treats as
construction-in-process (hereinafter
"CIP") for federal income tax
purposes as of the assessment date
may be reported in the taxpayer's
schedule filed with the assessor at
fifteen percent (15%) of its cost as
reported for federal income tax
purposes. Qualified pollution
control property shall be valued as
provided in § 67-5-604,
notwithstanding its state of
completion.
(2) No back assessments of CIP, as the term is used in subdivision (g)(1), shall occur prior to January 1, 1994. If back assessments have occurred involving CIP, those assessments shall be voided and all taxes paid shall be refunded to those taxpayers who have an action or claim pending before an assessing authority or court on the CIP issue.
67-5-904. Schedules - Leased Property.
- (1) For the purpose of assessing leased property, it is the further duty of the taxpayer to list fully on a schedule provided by the assessor all tangible personal property which is leased by the taxpayer for the conduct of the taxpayer's business.
- (2) Leased property shall
include equipment, machinery and all
tangible personal property used in
the conduct of, or as a part of, the
taxpayer's business including, but
not limited to, the following:
- Equipment that is leased only, not sold;
- Equipment that is leased at nominal rent or loaned under certain circumstances;
- Equipment that is leased and not permitted to be sold;
- Leased coin-operated machines and devices;
- Equipment that is placed on location;
- Vehicles, automobiles, trucks;
- Furniture; and
- Electronic equipment.
- The lessor, or owner of leased tangible personal property, shall provide such information as the assessor may request regarding the location, valuation or use of such property.
