Knowledgebase-Rounding Up the Certified Tax Rate

Information Product

Title:Rounding Up the Certified Tax Rate
Summary:Rounding-up on the certified tax rate
Original Author:Shechter, Leslie
Product Create Date:06/24/93
Last Reviewed on::10/24/2016
Subject:Tax rates; Tax rates--Municipal
Type:Legal Opinion
Legal Opinion:

Reference Documents:

Text of Document: June 24, 1993

You have asked about the certified tax rate; specifically, whether a municipality may "round up" the rate. The certified rate is estimated to be between 84 cents and 87 cents. You have asked whether the City can "round up" the rate to 90 cents. The answer is no. The law does not permit "rounding up." The City may exceed the certified tax rate only by complying with Tennessee Code Annotated, 67-5-1702 which requires a notice and a public hearing and a resolution or ordinance levying a tax rate in excess of the certified rate.

Jim Leuty has sent you the information you requested on how to determine the certified rate and the process for obtaining approval of that rate. The certified tax rate must be figured on the basis of a formula and is that which will provide the same ad valorem revenue for the jurisdiction as was levied during the previous year, considering only those properties which were in both the previous year and current years tax base.

The tax rate the city submits to the Comptroller for their approval should comply with this statutory requirement. A conversation with Kelsie Jones, Executive Secretary of the State Board of Equalization, revealed that their office does not even allow "rounding up" to the nearest penny. Mr. Jones advised that they would allow a "rounding up" from four digits past the decimal point to three. For example, if the certified rate was 1.5567, the city could round up to 1.557.

If the city wishes to levy a tax rate in excess of the rate approved by the State, by increasing the rate from 84 cents to 90 cents, it must comply with the notice and hearing provisions of Tennessee Code Annotated, 67-5-1702.

Thanks for asking MTAS to help.

With warm regards,
Leslie Shechter
Legal Consultant

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