With reappraisals recently completed in Sullivan County, taxpayers in Kingsport are reaping the benefits of higher property values that enable the Board of Mayor and Aldermen to set the fourth lowest tax rate in city history. The new rate is $1.9750 per $100 of assessed value, while the previous rate was $2.07.
The tax rate had been as high as $2.39 in 2000.
Tennessee assesses residential property at 25 percent of market value and 40 percent for commercial/industrial. In many states, it is not uncommon to see property taxes applied to 100 percent of assessed value.
“Tennessee has a rollback provision that is very favorable to residential property owners,” said City Manager Jeff Fleming. “This, coupled with the fact that taxes are only assessed on ¼ of the property value, makes Tennessee an extraordinarily affordable place to live.”
In cities that are located in two or more counties, the tax rate is also equalized between counties. “For the first time in recent memory, the Kingsport city tax rate in both Hawkins and Sullivan Counties is the same.”
While the rate is one of the lowest in city history, the combination of rate and individual property value determines the actual out-of-pocket cost to a homeowner.
“If your property is above the citywide median value, your out-of-pocket might be slightly higher. If it is below median, you may actually pay less out-of-pocket than you did four years ago. The basic rule is that the city receives the same aggregate amount, but the burden is shifted,” Fleming explained. “It’s Tennessee’s built-in tax relief for those who need it most.”
Under the new tax rate, annual city taxes on a $50,000 home would be $247, a $175,000 home would pay $740, a $300,000 home would pay $1,481, and a $500,000 home would pay $2,469.
Annual taxes on a $500,000 business would be $3,950, a $1,000,000 business would pay $7,900 and a $5,000,000 business would pay $39,500 and a $15,000,000 business would pay $118,500.
“A growing tax base is the sign of a fundamentally-sound, healthy community,” Fleming added. “Kingsport continues to be the lowest cost among the Tri-Cities in terms of taxes and fees. We provide the highest quality services with the greatest value proposition to our customers.”
In 2016, the city’s ten largest property taxpayers accounted for 33% of all taxable assessed value – that’s down from 37.5% in 2005. A more diversified tax base is one factor that helped improve the city’s financial ratings from “good” to “strong.”