Assessment vs. Taxation – Separation of Duties
The assessment function is distinct from the taxation function. The Assessor of Property appraises and classifies the property, and then applies the statutory percentages to appraisals to determine assessments.
Local property tax rates are set by the Sequatchie County Commission and the City Commission. Taxes are collected by the County Trustee and by City collecting officials.
The Assessment Function
The Assessor of Property:
- Appraises real estate for assessment purposes
- Tracks changes in ownership, addresses, and property boundaries
- Is required by state law to verify certain information on real estate sales with buyer and seller
- Appraises and assesses business tangible personal property
- Responds to requests for public information
- Must possess both appraisal and administrative skills to do the job
- State Board of Equalization establishes policies and procedures for local Assessors of Property and hears property appeals beyond the county level
- Division of Property Assessment (DPA) monitors the work of Assessors to ensure proper procedures are followed, provides technical assistance during reappraisal programs, and provides manuals and educational programs for use by Assessors
The Assessment Cycle:
- Property appraisals are established during periodic reappraisal programs using current real estate values on either a 6 year, 5 year, or 4 year cycle. Sequatchie County is on a six year cycle with the next reappraisal in 2023.
- Between reappraisals, the Assessor’s appraisals generally remain constant, with the exception of instances where the property has changed
- In addition to assessing new construction annually, the Assessor’s office performs a systematic field review of a portion of the county each year, so that during a reappraisal cycle all parcels of property are reviewed
- Changes to the property discovered during review may be added to or subtracted from the property value between reappraisals, but with the appraised value based on the previous reappraisal program
The Appraisal Process:
- An appraisal is an estimate of the most probable selling price of a property.
- Mass appraisal techniques are employed.
- Physical characteristics listed (dimensions, construction type, age, and condition of buildings; size and features of land).
- Computer resources are used as a tool to assist in the intensive analyses and calculations required.
The Assessment Process:
Property is classified based on its use and statutory assessment percentages are applied to appraised values. The percentages are as follows:
- 25% Residential Property
- 25% Farm Property
- 40% Commercial and Industrial Property
- 55% Public Utility Property
- 30% Business Personal Property
An assessment change notice is required to be sent when the value or classification changes.
Appeals can be made based on several factors, such as property value, inconsistency with comparable properties, incorrect classification. Taxes are not a valid basis for an appeal.
The steps in the appeal process are as follows:
- Informal discussion with the Assessor of Property
- County Board of Equalization
- State Board of Equalization (must meet with County Board first)
- Chancery Court
The Taxation Function
The Property tax rates are established by the County Commission and city governing bodies. The Assessor of Property provides assessed value totals to both county and city governing bodies. Total assessment and estimates of other revenue are then combined with budget projections to determine the property tax rates for the county and city.
In a reappraisal year, if the local governing body intends to adopt a tax rate that would generate more revenue than the previous year, a public hearing must be advertised and held.
The separation of the assessment function and the taxation function protects property owners from possible unfair treatment.