Initial Property Tax Assessments

Initial Property Tax Assessments

April 01, 2013 | By Keith Martin in Washington, DC

Initial property tax assessments can be capped for wind farms at 33% of installed costs and for solar projects at 12.5% of installed costs, the Tennessee state attorney general said.

He said such a cap does not violate a requirement in the state constitution that “[t]he ratio of assessment to value of property in each class or subclass shall be equal and uniform throughout the State.” The caps would not bind assessors when the property is reassessed. They would also be consistent with a finding by the state legislature that wind and solar projects generate only a fraction of the electricity generated by a conventional power plant.

The state legislature is considered imposing the caps to encourage more use of renewable energy. The wind cap is already in effect. The state legislature is considering extending the concept to solar, geothermal and hydrogen energy. The initial caps for geothermal and hydroegen energy would be set by the state department of environment and conservation.

The state attorney general’s views are in Opinion No. 13-19. The opinion is dated March 11, 2013.

In February, the attorney general said in a separate opinion that it would not be constitutional for the state legislature to provide for a four-year phase in of higher property tax assessments when a business makes capital improvements. He said this was similar to an earlier proposal he concluded was unconstitutional to waive property taxes in a depressed part of Jackson, Tennessee in order to encourage new economic development.

It is hard to use property taxes to achieve such goals given the equal assessment clause in the state constitution. The opinion on the four- year phase in is Opinion No. 13-11 and is dated February 13, 2013.