Tuesday, February 28, 2012

Taxpayer Confidentiality in Tennessee - Hotel Taxes

Tennessee takes taxpayer confidentiality very seriously and has very pro-taxpayer laws that protect taxpayer information for state-administered taxes. According to a recent attorney general opinion, that same confidentiality also extends to certain locally-administered hotel occupancy taxes as well.

The ruling draws a distinction between local hotel taxes that have granted clerks the same rights and privileges that the Dept. of Revenue has in administering tax laws. According to the ruling, information provided to clerks in Rhea County and Madison County is protected, while information provided the tax collector in Pigeon Forge, Tennessee is not protected.

Based on the distinction recognized by the Attorney General, the confidentiality of taxpayer information on hotel taxes will depend on the particular private act that authorizes the tax.

http://www.tn.gov/attorneygeneral/op/2012/op12.20.pdf

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Tennessee Property Tax Appeals - The Follow-On Tax Year Dilemma

A procedural quirk that often becomes relevant in Tennessee property tax appeals involves follow-on tax years. When an appeal is pending for one tax year, it is not uncommon for the next appeal period to come before a hearing is scheduled for the first tax period. This creates a dilemma for taxpayers. Do they file a second appeal or do nothing?

We have generally advised taxpayers to file an appeal for the second year out of an abundance of caution, but the State Board of Equalization generally allows taxpayers to amend appeals to include a subsequent tax year when the appeal for the prior year has not been heard due to the volume of appeals. In those instances, the State Board will take jurisdiction over the second year. We like to use this as a fall-back position, but taxpayers handling their own appeals do not always file a second appeal. Despite this fact, the failure to file a second appeal is usually not held against them.

A recent decision on this point can be found at the following link (page 2):

http://www.comptroller1.state.tn.us/repository/SB/judgethompson/2012.02.24-CopeDeborahA.pdf

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Monday, February 20, 2012

Lower income during "Recession" does not Translate into Lower Property Tax Value


There is a general belief that the "economic downturn," "recession," or whatever you want to call it that has been gripping our country for the last few years should translate into property tax savings now that county assessors are going through the process of reappraising property. Makes sense enough. We have certainly seen the sales price of  personal residences going down.
For business property, that conventional wisdom does not always hold true. Take a recent administrative decision in Tennessee involving the Loews in Nashville. The Taxpayer argued that the valuation of the hotel should be reduced relying on an income analysis that used the reduced income for the hotel in 2009. The judge rejected the focus on one year of income adopting instead the assessor's valuation that relied on an income analysis for the period from 2005 through 2009. The low point was 2009, so the income used by the assessor was considerably higher, resulting in a higher property tax value.

For taxpayers developing valuation positions, this case is instructive on what factors administrative judges will look at when considering fair market value challenges. 

Decision: http://www.comptroller1.state.tn.us/repository/SB/judgeminsky/2012.02.17-LoewsNashvilleHotelCorp.pdf

Friday, February 17, 2012

Tennessee Property Tax Tale of Reasonable Cause


In Tennessee, one out of every twenty property tax decisions (and maybe more) address the question of whether a taxpayer has taken the necessary steps to appeal the assessor's valuation. It's a canned opinion that administrative law judges use that addresses the statutory appeal procedures and whether the taxpayer has established a "reasonable cause" for why they failed to timely appeal the assessment. In an overwhelming majority of these decisions, the administrative judges conclude that the taxpayer has failed to establish a reasonable cause. Ignorance of the law is no defense...

That is what makes a recent decision somewhat remarkable. The taxpayer not only failed to timely appeal to the county board but also failed to timely appeal to the state board. The ALJ concluded that there was reasonable cause in both instances. Reasonable cause for the late filed county appeal was based on communications from the assessor's office that she would be contacted a later date because of the significant number of appeals. On the deadline for the appeal to the state board, the taxpayer was out of town. You're thinking, no way, but you would be wrong. That was reasonable cause too, and the appeal went forward and the taxpayer received partial relief on a valuation issue involving whether her property had lake access.

All in all, this is a case to have handy in the event that you are trying to deal with missed property tax appeal deadlines in Tennessee.

The decision can be found at this link ... http://www.comptroller1.state.tn.us/repository/SB/judgecollier/2012.02.14-EvansMargaretLarson.pdf

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