2023 Tennessee Code › Title 67 - TAXES AND LICENSES (§§ 67-1-101 — 67-10-107) › Chapter 5 - PROPERTY TAXES (§§ 67-5-101 — 67-5-2803) › Part 8 - CLASSIFICATION AND ASSESSMENT - REAL PROPERTY (§§ 67-5-801 — 67-5-809) › Section 67-5-801 - Classification and rate of assessment

(a)
For the purposes of taxation, all real property, except vacant or unused property or property held for use, shall be classified according to use and assessed as provided in this section:
(1)
Public Utility Property.
Public utility property shall be assessed at fifty-five percent (55%) of its value;
(2)
Industrial and Commercial Property.
Industrial and commercial property shall be assessed at forty percent (40%) of its value;
(3)
Residential Property.
Residential property shall be assessed at twenty-five percent (25%) of its value; and
(4)
Farm Property.
Farm property shall be assessed at twenty-five percent (25%) of its value.
(b)
(1)
Where a parcel of real property is used for more than one (1) purpose, which would result in different subclassifications and different assessment percentages, then it shall be apportioned among the subclasses according to guidelines established by rules and regulations of the state board of equalization.
(2)
Notwithstanding subdivision (b)(1), when a parcel of real property is the principal residence of its owner, contains not more than one (1) rental unit, and is used as a short-term rental unit, as defined by §
13-7-602
, the assessor of property should presume the classification of the property is residential.
(3)
When a parcel is classified as residential under subdivision (b)(2), the same owner of the property may request residential classification for a maximum of one (1) additional parcel in this state and the assessor of property should presume residential classification when the one (1) additional parcel meets the following conditions:
(A)
The parcel of real property contains not more than one (1) rental unit;
(B)
The property is used as a short-term rental unit, as defined by §
13-7-602
;
(C)
The owner of the property lives on the property a minimum of fourteen (14) days each year or at least ten percent (10%) of the number of days the property is rented as a short-term rental unit, whichever is greater; and
(D)
The owner of the property annually files a written affidavit with the assessor of property by September 1 of the prior year verifying that the property meets all requirements and the owner has no more than one (1) additional parcel in addition to their principal residence under this section.
(c)
(1)
All real property that is vacant, or unused, or held for use, shall be classified according to its immediate most suitable economic use, which shall be determined after consideration of:
(A)
Immediate prior use, if any;
(B)
Location;
(C)
Zoning classification; provided, that vacant subdivision lots in incorporated cities, towns, or urbanized areas shall be classified as zoned, unless upon consideration of all factors, it is determined that such zoning does not reflect the immediate most suitable economic use of the property;
(D)
Other legal restrictions on use;
(E)
Availability of water, electricity, gas, sewers, street lighting, and public services;
(F)
Size;
(G)
Access to public thoroughfares; and
(H)
Any other factors relevant to a determination of the immediate most suitable economic use of the property.
(2)
(A)
If, after consideration of all such factors, any such real property does not fall within any of the definitions and classifications in this section, such property shall be classified and assessed as farm or residential property.
(B)
When a mobile home attached to real property as described in §
67-5-802
is used as a residence, the assessor of property may presume the classification is residential.
Amended by 2020 Tenn. Acts, ch. 787, s 11, eff. 1/1/2021.
Amended by 2017 Tenn. Acts, ch. 297, s 1, eff. 5/5/2017.
Acts 1973, ch. 226, § 6; T.C.A., § 67-611.