State Tax Laws > Property Taxes > Summary > Tennessee
For the complete text of Tennessee statutes and other property tax information please refer to the Tennessee Department of Revenue.
Property Classification:
To preserve open space in or near urban areas, Tennessee authorizes the special assessment of real property used as forest or open space land under the same general provisions that apply to agricultural land. However, no person may have more than 1,500 acres of land within any one taxing jurisdiction classified and assessed as forest, open space, or agricultural land. (Sec. 67-5-1002, T.C.A.; Sec. 67-5-1003, T.C.A)
Forest and Open Space Lands (Sec. 67-5-1002)
Forest land - means land constituting a forest unit engaged in the growing of trees under a sound program of sustained yield management or any tract of 15 or more acres having tree growth in such quantity and quality and so managed as to constitute a forest.
Open Space Land - is defined as a parcel of land (1) that is at least three acres in size; (2) that is characterized principally by open or natural condition; and (3) the preservation of which would provide the public benefits such as the study and enjoyment of natural areas and the conservation of natural resources, water, air, and wildlife.
Property may be classified as open space land if it is situated in a designated open space area and if, between the date of designation and the date of classification, there is no change in the use of the land that adversely affects its essential character as open space land. ( Sec. 67-5-1002, T.C.A.; Sec. 67-5-1007, T.C.A; Sec. 67-5-1004, T.C.A.)
Application - Any owner of land may apply for its classification as forest land by filing a written application with the assessor of property by April 1 of the first year for which the classification is sought. Reapplication thereafter is not required so long as the ownership as of the assessment date remains unchanged. New owners of the land who desire to continue the previous classification must apply with the assessor by April 1.
In determining whether any land is forest land, the tax assessor shall take into account, among other things, the acreage of such land, the amount and type of timber on the land, the actual and potential growth rate of the timber, and the management practices being applied to the land and to the timber on it.
An application for classification of land as forest land shall include a description of the land, a general description of the uses to which it is being put, aerial photographs, if available, and such other information as the tax assessor or state forester may require to aid him in determining whether the land qualifies for designation as forest land.
Change in Use - A portion of the tax savings attributable to an open space or forest land classification is recaptured when property is converted to a nonqualifying use. Upon conversion, the tax assessor must (1) compute the difference in the present use value assessment and the value assessment using general valuation provisions for each of the preceding three years for forest land or five years for open space land and (2) notify the county trustee of the amount of "rollback taxes" payable by virtue of the conversion.
If the converted land constitutes only a portion of a parcel classified as open space or forest land, the assessor apportions the assessment of the parcel and enters the apportioned amount as a separately assessed parcel on the assessment roll. The apportionment is made for each of the years to which rollback taxes apply.
Valuation and Assessment: (Sec. 67-5-1008 T.C.A.)
A parcel of land classified by the assessor as agricultural, forest or open space land shall be valued by dividing three (3) into the sum of: (The formula is the same as that used for agricultural land)
(i) two times the use value as defined in this subsection, plus
(ii) the farm land value as defined in this subsection.
Use value shall be determined by dividing:
(i) The annual agricultural income estimate for such parcel as determined by the division of property tax assessment by;
(ii) The capitalization rate as determined herein.
Once the land has been classified as forest land the assessor will appraise the land and compute the taxes each year based upon both:
1. The twenty-five percent (25%) of appraised value applicable to property in the farm classification and present use value; and
2. Farm classification and value as determined under part 6 of this chapter, but taxes shall be assessed and paid only on the basis of farm classification and present use value. (NOTE: This second calculation is done solely for the purpose of determining the roll back tax if the property were to no longer qualify as forest land.)
Severance or Yield Tax:
The state of Tennessee does not have a severance or yield tax on timber or timber products.