AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 5, relative to property tax.
Impact
If implemented, this bill will significantly impact how local governments assess property taxes, specifically by altering the criteria for property tax classifications. With the potential for properties to be deemed zoning-exempt, property owners may see a decrease in their property tax liabilities, which could affect local revenue streams for counties. The measure could encourage investment and development in real estate by providing tax incentives; however, it also raises concerns over equitable taxation and revenue adequacy for public services.
Summary
Senate Bill 2238 aims to amend the Tennessee Code Annotated, specifically Title 67, Chapter 5, which governs property taxation. The bill introduces provisions allowing counties to establish programs permitting property owners to apply for their properties to be classified as zoning-exempt. This classification would affect how property taxes are assessed, allowing assessments based on the original zoning classification at the time of the owner's acquisition, rather than current market values.
Contention
Debates surrounding SB2238 may arise from differing opinions on its fiscal implications and the fairness of property tax assessments. Proponents argue that a zoning-exempt classification will aid property owners in reducing tax burdens and stimulate economic activity. Conversely, opponents might contend that this creates an uneven playing field in taxation, where certain properties benefit from such exemptions while others do not, potentially leading to a loss of needed municipal revenue and underfunding of essential services.