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City discusses tax relief program

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Shelbyville City Council held a workshop Monday to discuss the consideration of matching the State of Tennessee’s property tax relief program.   

Changing the max   

The City currently employs the use of Tennessee’s tax relief program, which applies to elderly homeowners (65 and older), disabled homeowners, disabled veteran homeowners, and widow(er)s of disabled veteran homeowners.   

For disabled veterans and their families, there is no limit on income to qualify for the program. But there is a $175,000 maximum limit on their house’s market value on which tax relief is calculated. For the disabled or elderly to qualify in 2021, there is a maximum 2020 income of $31,190 and a maximum market value of $29,100 on which the tax is calculated.   

The City also provides a supplemental 12 percent discount (with a maximum of $53) on the remaining balance due after the state tax relief has been applied. This amount is 100% funded by the City.   

For example, if an appraisal comes out at $55,300, with the current tax rate $1.59 per $100 of assessed value, the total tax payment for the year will be $220. If the owner qualifies for the state tax relief, the payment goes down to $104 after subtracting $116. The City’s program will then take away 12 percent of that total, so the homeowner’s final payment will be $91.52.   

But what Council is considering is matching the state’s tax relief supplement to create a maximum supplemental discount of $116, instead of $53.   

“That’s the beauty of this program— it’s governed by the state and governed by the principles that have been established, and not governed by anything that the city or county is doing,” said City Manager Joshua Ray.   

What about a tax freeze?   

Ken Morrell from the Tennessee Comptroller of the Treasury presented at Monday’s workshop the differences between a tax relief program and a tax freeze.  

Some of the key differences between tax relief and tax freeze include:  

- Freezes are local and funded by local dollars while the relief program is a state program  

- Tax relief programs provide tax rebates or credit  

- The tax freeze is only available to low-income, elderly homeowners (65+ years) and have an acreage limit  

- Tax freezes can affect the local tax rate and can shift the tax burden  

What’s important to remember with the tax freeze is that taxes are frozen—not property values, assessments, or rates.  

Bedford County Assessor of Property, Ronda Clanton, said adopting the tax freeze could possibly cost the city or county administrative money. She would essentially have to review every piece of property every year—all while qualifying homeowners would not be benefiting unless there’s a tax increase or evaluations go up.  

“What the freeze does is give you the concept of ‘this is it, until death do us part.’ But you wouldn’t necessarily receive those savings like you would with this 12 percent,” said Ray.  

In addition, the tax freeze could not be done in time for this year. Ray said Council will discuss implementing a tax freeze for next year. But for now, they are looking to provide effective tax relief by implementing an increased maximum.  

There are approximately 300 taxpayers in Shelbyville in the Tax Relief Program. That number, according to Ray, is a very low number.  

“The thing we want to present back to council is the concept of, if you want to do more for the groups that are designated by the state, you can do more here, or...we can look at the tax freeze program in  

terms of ‘would that make a significant difference for those included on their tax bill annually,’” said Ray.  

Council’s next move is to hold a first reading of the ordinance on Sept. 27, which gives Council exactly 15 days for the next reading and then approval by vote before taxpayers begin paying in October.  

For more information on the tax relief program or to apply, visit tncot.cc/taxrelief.   

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