Tennessee ALJ Grants Motion to Reconsider Non-Standard Valuation of Property

      A Tennessee Administrative Law Judge held on April 4, 2013 that Georgia Pacific's ("GaPac")

nonstandard valuation should be considered on appeal. In re Georgia Pacific Corrugated II, LLC (Shelby County, Apr. 4, 2013). In so ruling ALJ Brook Thompson, recognized that Tenn. Code Ann. 67-5-903(e) did not become effective until after GaPac filed its original 2011 property tax schedule. Thus, the amended law, which prevents taxpayers from filing amended schedules that introduce non-standard valuations for the first time as part of the amended return, was not applicable to GaPac for the 2011 year. Accordingly, GaPac should be allowed to present its nonstandard valuation as part of the administrative appeal.

     In this case, GaPac filed its original return in March 2011. In April 2011, the Tennessee General Assembly amended the Tennessee property tax law, stating that nonstandard valuations may not be raised for the first time as part of an amended return. Subsequent to this change in the law, GaPac amended its original March 2011 filing, asking for a nonstandard valuation. On appeal, the ALJ concluded that the amended law applied and prohibited the nonstandard valuation, dismissing the case.

     On a motion to reconsider, Judge Thompson reversed the order dismissing the case, concluding that Tenn. Code Ann. 67-5-903(e) (as amended) did not become effective until after the original schedule was filed. "In a case with similar facts, ALJ Loesch ruled that the timing of the amendment to the statute did not preclude the subsequent claim of non-standard valuation." See Armstrong Hardwood Flooring Company (Davidson County, Sept. 27, 2011).

     Practice Point: While this ruling could have limited significance for most taxpayers, based on the delay in hearings in Tennessee on property tax matters, taxpayers who failed to present a nonstandard valuation for the 2011 tax year, may still be able to support a nonstandard valuation even though a non-standard valuation was not filed with the original filing. Thank you Armstrong Hardwood and Georgia Pacific!