FOR IMMEDIATE RELEASE CONTACT: MARK RHODES 615-741-3036
(NASHVILLE, TN), August 15, 2012 — State Senator Brian Kelsey (R-Germantown) and Representative Steve McManus (R-Memphis) requested an Attorney General opinion today regarding whether the City of Memphis can charge newly annexed South Cordova residents for retroactive property taxes. The city annexed the residents effective July 1 but has told residents that they will be charged property taxes based on January 1 assessments.
State law on the matter seems to say that property taxes must be based on whether the property has been annexed as of January 1. The city disagrees. Memphis acknowledges that it did not begin providing services to the area until July 1 but claims that it can still collect property taxes for the year.
“It just doesn’t seem right that you can start charging property taxes for an annexed area before you provide services,” said Senator Kelsey. “If that is the law, I plan to file legislation to change it when the General Assembly convenes in January. The citizens of South Cordova deserve a voice in the legislature to stand up for them in this dispute.”
The matter is currently in litigation in Shelby County Chancery Court. The Court may consider the opinion of the Tennessee Attorney General to be persuasive in the case. A copy of the opinion request is attached.
SEE COPY OF THE REQUEST BELOW:
The Honorable Robert E. Cooper, Jr.
Attorney General and Reporter
State of Tennessee
425 Fifth Avenue, North
Nashville, Tennessee 37243
Dear General Cooper:
I am writing to seek your guidance concerning the assessment of municipal ad valorem taxes on annexed property. As you may know, a few cases in this state address the permissibility of an annexing municipality to levy and collect property taxes on owners and residents in annexed areas.
For instance, in Mayor & Aldermen of Chattanooga v. Raulston, 117 Tenn. 569, 97 S.W. 456 (1906), the Tennessee Supreme Court held that it is impermissible for an annexing municipality to levy tax on real property that became part of the municipality after the applicable tax day of the year in which the tax was assessed. In Piper v. City of Memphis, 861 S.W.2d 832 (Tenn.Ct.App. 1992),the Tennessee Court of Appeals held that a municipality could not permissibly collect property taxes from owners of property in an area annexed by the city for the year 1990 because the property did not become a part of the municipality until after the applicable tax day for the calendar year, which was January 1.
The legal rationale for these decisions is that the annexed property was not a part of the annexing municipality on or before the applicable tax day of the calendar year to which the assessment applied. It is not clear from state statutes and case law whether it is permissible for an annexing municipality to make an assessment of property taxes in any given fiscal year if the property becomes a part of the municipality on or after July 1 of that same fiscal year.
Therefore, I request the opinion of your office on the following questions:
(1) If real property is annexed and becomes a part of an annexing municipality on or after July 1 of any given fiscal year, is it permissible under T.C.A. §§ 6-51-101, et seq. or any other law for the annexing municipality to make an assessment of ad valorem taxes on the annexed property in that same fiscal year?
(2) If the answer to Question 1 is yes, then is it permissible under state law for the municipality to levy ad valorem taxes on the annexed property for the period from January 1 through June 30 of the calendar year in which the assessment is made?
(3) Is there legal authority for an annexing municipality to make an assessment of ad valorem taxes in any given fiscal year against real property that is annexed and becomes a part of a municipality on or after July 1 of that fiscal year if the owner of the annexed property and/or a description of the annexed property was not identified on the municipal property assessor’s assessment records as of the date of making the assessment?
(4) Is there legal authority for an annexing municipality to make an assessment of ad valorem taxes in any given fiscal year against real property that is annexed and becomes a part of a municipality on or after July 1 of that fiscal year if the owners of the annexed territory have not been afforded any rights and privileges of citizenship in accordance with the provisions of the annexing municipality’s charter as of the date of making the assessment?
If you have any questions or need further information, please feel free to call my office at 615-741-3036 or Megan Moore in the Office of Legal Services at 741-4858. I look forward to your response.