Counties can't set income limits on elderly tax breaks, AG says

By ERIK SCHELZIG, Tennessean.com
Associated Press
April 1, 2007

Implementing new rules to exempt some elderly homeowners from property tax hikes will not be as simple as Senate Republican Leader Mark Norris had hoped, despite overwhelming voter approval for a constitutional amendment on the issue in November.

In an opinion released last week, Attorney General Bob Cooper wrote that despite Norris' claims, local governments would not be allowed the flexibility to determine at which income level a property tax freeze can go into effect.

Norris, of Collierville, said he had written the constitutional amendment with the intention of having the legislature set the maximum income level to qualify but to allow local government to enact thresholds equal to or below that figure.

Cooper said the text does not reflect Norris' wishes.

"Nothing in the amendment indicates that the General Assembly may delegate this power to the localities," Cooper wrote. "In the opinion of this office, no authority is granted by which a locality can adopt the tax relief program at a lower level."

Norris — who has proposed a $50,000 annual income cap to qualify for the tax break — called Cooper's opinion the latest setback in a decades-long effort to create property tax relief for the elderly.

Norris upset with opinion

The original 1979 law to create a property exemption for the elderly fell to a legal challenge by county commissioners who feared an erosion of their local tax base.

Norris said he disagrees with the legal argument that allowing differing levels of property taxes would violate state requirements for consistent tax rules.

"That's what amending the constitution was intended to be all about last year — to make it clear that the uniform taxation requirements that everybody always talks about were not an impediment in this case," he said.

Chad Jenkins, deputy director of the Tennessee Municipal League, said his organization welcomes the attorney general's opinion. Jenkins said local governments feared a hodgepodge of varying tax rules in all the state's counties and cities.

Cooper did leave open the possibility of lawmakers' setting up different income caps for each of Tennessee's 95 counties based on income levels.