Tax Freeze vs.

Tax Relief

Hamilton County, Tennessee

August 2017
 Qualifications
Tax Freeze Program Tax Relief Program
(TCA 67-5-705) (TCA 67-5-701 thru 704)

Benefits: Benefits:
Elderly (65 or older on/before Elderly (65 or older on/before
December 31) December 31)
Disabled at any age
Disabled veteran or widow of
disabled veteran at any age
(enhanced benefit)
Income level adjusted Income level adjusted
annually - $38,720 for 2017 annually - $29,180 for 2017
 Qualifications (cont.)
Tax Freeze Program
Must own and use the
property which you are
applying as your primary
residence limited to 5 acres
Annual income from all
owners and all sources
includes, but is not limited to:
Social Security; Supplemental
Security Income; Retirement or
Pension benefits; Veterans
Administration benefits;
Workers Compensation;
Salaries and wages; Interest and
Dividends
Tax Relief Program
Must own and use the
property which you are
applying as your primary
residence
Annual income from all
sources includes, but is not
limited to:
Social Security; Supplemental
Security Income; Retirement or
Pension benefits; Veterans
Administration benefits;
Workers Compensation;
Salaries and wages; Interest and
Dividends
 History
Tax Freeze Program Tax Relief Program
Legislation approved by State The State Tax Relief Program
in 2007 has been in effect since
1973.
County program starts upon County program starts upon
approval by Commission approval by Commission
action (no benefit to action (immediate benefit to
qualifying taxpayers in 2017) qualifying taxpayers in 2017)

Program is currently in effect County match of State

in 23 counties and 31 cities program is in effect in 26
counties and 76 cities
 Benefits to Taxpayer
Tax Freeze Program
Present benefit No benefit
until next tax increase or
reappraisal. Future taxes will
be frozen at 2017 amount.
Benefit very difficult to
quantify
Taxpayer benefit for Tax Year
2017 - $-0-
Tax Relief Program
Present benefit provides
immediate benefit to eligible
taxpayers
Benefit easy to quantify
For purposes of this presentation, we
computed the County benefit as 50%
of the benefit provided by the State
Taxpayer benefit for Tax Year 2017
Elderly/Disabled $93.33
Disabled Veteran/Widow - $604.89
 Administrative Issues
Tax Freeze Program Tax Relief Program
Monitoring very difficult Monitoring very little
(law requires us to verify additional cost State provides
income levels, which we do all verification of qualifications
not currently have the ability and income
to do)
Implementation costs - Implementation costs very
approx. $250,000 little, if any
Annual costs approx. Annual costs very little, if any.
$200,000 (2-4 additional Current staff should be able to
personnel, plus software support Tax Relief program.
maintenance)
 Costs to County Taxpayers
Tax Freeze Program
Will result in shift of tax
burden from taxpayers
qualified for the Tax Freeze
Program to non-qualifying
taxpayers
Tax Reappraisals will result in
shift of tax burden
Tax shift is difficult to
estimate based upon the
complexity of the Tax Freeze
program
Tax Relief Program
Will result in shift of tax
burden from taxpayers
qualified for the Tax Relief
Program to non-qualifying
taxpayers
Tax Reappraisals will not result
in shift of tax burden
Cost of program can be
estimated and budgeted
annually
 Coverage of State Tax Relief Program
Qualifying Ham. Co. Taxpayers in 2016 - 3,427

State-Provided Benefit to Qualifying Taxpayers:

Elderly and/or Disabled $ 186.65
Disabled Veteran or Widow of Vet $ 1,209.78

Cost of State Program in TY 2017 - $ 1,000,000

Projected Cost of County Program

(assuming 50% of State program) - $ 500,000