BLOUNTVILLE — Now that the Sullivan County Commission has set a tax rate for the current budget cycle, tax notices for county property taxes will soon be mailed to every property owner, countywide — including those inside the cities of Kingsport, Bristol, Bluff City and Johnson City.
Property owners inside cities pay county property taxes and city property taxes.
County property taxes are due and payable beginning Oct. 1 through the last day of February 2014.
Unlike the Kingsport Board of Mayor and Aldermen, the Sullivan County Commission did not raise taxes this year.
The commission instead voted to adopt the certified tax rate, as calculated by the state.
That might look like a reduction on paper — from $2.3307 (per $100 of assessed value) last year to the state certified $2.3054 (per $100 of assessed value) this year. But the certified tax — sometimes referred to by state officials as the “neutral” rate — is meant to provide the county with the same total revenue from property taxes as last year.
It should mean roughly the same tax bill as last year for owners of property that increased in value at the average rate from the last reappraisal four years ago.
On the whole, property in Sullivan County increased in value by about 1 percent for this reappraisal, Property Assessor Ron Hillman said Friday.
That 1 percent increase in value is reflected in the approximate 1 percent decrease in the county property tax rate.
For example, a house valued at $100,000 prior to the reappraisal that increased would now be appraised at $101,000.
The old tax bill would be $582.68 ($100,000 x .25 = $25,000/$100 = 250 x $2.3307 = $582.675).
With the certified rate the tax bill will be $582.11. ($101,000 x .25 = $25,250/$100 = 252.50 x $2.3054 = $582.1135).
Residential property in Sullivan County is assessed at 25 percent of appraised value, while commercial property is assessed at 40 percent of appraised value.
If a property’s value stayed absolutely the same, the tax bill should be slightly lower this year. In the example used above, if that residence still is valued at $100,000, the tax bill should be around $576.35 this year, down from the $582.68 figure.
But if a property’s value increased more than the 1 percent average in the past four years, the tax bill will be higher this year, even with the certified tax rate.
While 1 percent was the average increase countywide, the rate of growth — influenced by market trends and other factors — varies throughout particular neighborhoods and areas.
Hillman said the Kingsport area saw better growth during this reappraisal than other areas — and property values as a whole within the city of Bristol, Tenn., actually dropped.
All property owners should have received notification earlier this year of their property’s value based on the reappraisal.
Hillman said notices went out from his office in April to all property owners, along with information on how to appeal the new appraisal.
The appeals process took place in June. Hillman said relatively few people filed appeals — not surprising considering the small average increase.
The 1 percent is a stark contrast to what property owners saw in 2009 and 2005.
In 2009, then-Property Assessor Bob Icenhour said the increase was “rather high” at more than 20 percent. That resulted in certified tax rate 40 cents less than the year before.
In 2005 the increase was between 10 percent and 12 percent.
All parcels in the county are reappraised every four years.
Changes in appraised values are driven by improvements and by the market for property.
State law requires that, in the year of reappraisal, each taxing jurisdiction must establish a tax rate referred to as a “certified tax rate,” which will generate the same total revenue from property taxes as the previous year.
State law requires the county commission to recognize a state-certified rate in reappraisal years — or to declare an increase in taxes if they adopt a higher rate, even if it is below or equal to the current rate.
Counties are not permitted, under state law, to round up — but they may round down.
In other words, Sullivan County could have adopted a tax rate of $2.30 — but couldn’t “round up” to $2.31 without declaring a tax increase and holding public hearings.
The county’s 2013 property taxes generate revenue for fiscal year 2014, which began July 1.