Tennessee Code Annotated

Tenn. Code Ann. § 67-5-502 (2026)

Place and function of assessment

✓ current as of May 2026

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(a) The function of assessment shall be to assess:
- (1) All property, except such property as shall be assessed by the comptroller of the treasury, to the person or persons owning or claiming to own the same on January 1 for the year for which the assessment is made, if known and, if not, to unknown owners; provided, that any temporary improvement, or movable structures that are assessable under § 67-5-802, regardless of ownership, shall be assessed as real property as an improvement to the land where located;
- (2) The property held by executors and administrators in the county, district or ward in which the decedent resided at the time of the death until such have been distributed; but, if the deceased lived in another state, then the property shall be assessed where the personal representative resides; and
- (3) Personal property held by trustees and guardians of minors and severely and persistently mentally ill persons to each guardian or trustee in the county, ward or district where such minor, or severely and persistently mentally ill person resides, if a resident of the state; and, if a nonresident, then in the county, ward or civil district in which the guardian or trustee resides; provided, that guardian held property shall be assessed in the county where the guardian having control thereof renders such guardian's annual settlement.

(b) The property of all street railroad, gas, electric light companies, modern market telecommunications providers, and all public utility companies, including their franchises, used within any town, city, or taxing district where the office of the company is located outside of such incorporated city or town or taxing district, but with the main property within the city, shall be taxed in the city, town, or taxing district as if the office was situated within the city limits, and the property, including franchises of the corporations and joint stock companies that lie wholly or mainly within any incorporated city, taxing district, or town, or whose chief business is within any incorporated city, taxing district, or town, shall be assessed for taxation in such city, taxing district, or town; provided, that all real property and tangible personal property shall be taxed in the district where situated; and provided further, that public utility property of every kind, whether real property, tangible personal property, or intangible personal property, shall all be assessed for taxes at fifty-five percent (55%) of its value and that all property of modern market telecommunications providers shall be assessed at the rate applicable to commercial and industrial property of the same type.

(c) Leased personal property used by a public utility company or modern market telecommunications provider shall be assessed to such company or provider, unless such property is the subject of a lawful agreement between the lessee and this state or a local government, or instrumentality thereof, for payments in lieu of taxes. Other leased personal property shall be classified according to the lessee's use and assessed to the lessee, unless such property is the subject of a lawful agreement between the lessee and this state or a local government, or instrumentality thereof, for payments in lieu of taxes. Personal property that is leased to and used by any religious, charitable, scientific, or nonprofit educational institution purely and exclusively for one (1) or more of the purposes for which the institution was previously determined to be exempt under § 67-5-212 shall not be deemed to be used in a business or profession, and shall not be classified as industrial or commercial property for property tax purposes.

(d) All mineral interests and all other interests of whatever character, not defined as products of the soil, in real property, including the interest that the lessee may have in and to the improvements erected upon land where the fee, reversion, or remainder therein is exempt to the owner, and which interest or interests is or are owned separately from the general freehold, shall be assessed to the owner thereof, separately from the other interests in such real estate, which other interests shall be assessed to the owner thereof, all of which shall be assessed as real property, unless the lessee's or a sublessee's interest in any such real property, including any improvements erected upon the land, is the subject of a lawful agreement between a lessee and this state or a local government, or instrumentality thereof, for payments in lieu of taxes, entered into or amended on or after April 30, 2019, in which case such property shall be assessed solely to such governmental entity and shall be subject to all applicable exemptions.

(e) Notwithstanding contrary provisions of law, the comptroller of the treasury may establish a pilot program for assessing leased tangible personal property to the owner/lessor rather than the lessee. Participation in the program shall be voluntary, at the election of owner/lessors who are selected by the comptroller of the treasury to participate based on criteria that optimize savings in the cost of assessment compliance and administration. The comptroller of the treasury may impose a fee to defray the cost of administration. Participants shall be permitted to report leased property centrally in lieu of the schedules otherwise required under § 67-5-903 or § 67-5-904, and the comptroller of the treasury shall be responsible for distributing centrally reported assessments based on situs. Participants may be permitted to claim the business tax credit provided in § 67-4-713 for property taxes paid pursuant to a central assessment, and the credit may be taken at the participant's option either on the return due in the jurisdiction of situs or the jurisdiction from which the lease originated.

Amended by 2021EX2 Tenn. Acts, ch. 1, Secs.s7, s8, s9 eff. 11/3/2021.

Amended by 2019 Tenn. Acts, ch. 265, Secs.s 1, s 2 eff. 4/30/2019.

Amended by 2017 Tenn. Acts, ch. 490, s 3, eff. 6/6/2017.

Acts 1973, ch. 226, § 6; T.C.A., § 67-602; Acts 1990, ch. 1075, § 6; 1992, ch. 660, § 1; 1995, ch. 305, § 122; 1998, ch. 894, § 2; 2004, ch. 571, § 1; 2004, ch. 667, § 1.

Notes of Decisions

Cited in 11 cases (1 in the last 5 years), 1987–2025 · leading case: Nissan North Am., Inc. v. Haislip, 155 S.W.3d 104 (Tenn. Ct. App. 2004).

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Nissan North Am., Inc. v. Haislip, 155 S.W.3d 104 (Tenn. Ct. App. 2004). · cites it 4× “]” Tenn. Code Ann. § 67-5-502 (c)(2003). The legislative intent that leased property shall be classified and assessed according to the use of the lessee is reiterated in part nine at section 67-5-901(b).”

Colonial Pipeline Co. v. Morgan, 231 F.R.D. 518 (M.D. Tenn. 2005). · cites it 2× “II, § 28, Tangible Personal Property, subelassification (a); Tenn.Code Ann. § 67-5-501(8)(G); Tenn.Code Ann.”

United States v. The Metro. Gov't of Nashville & Davidson Cnty., Tennessee, 808 F.2d 1205 (6th Cir. 1987). · cites it 2× “See Tenn.Code Ann. § 67-5-502(6) (1983). 2 A leasehold, like any other proper *1209 ty, is to be valued at “its sound, intrinsic and immediate value, for purposes of sale between a willing seller and a willing buyer without consideration of speculative values____” Tenn.”

S. Ry. Co. v. Stair, 801 F. Supp. 37 (W.D. Tenn. 1992). · cites it 2× “All commercial and industrial property in Tennessee, other than railroad and utility property, is assessed locally by the county tax assessors under T.C.A. § 67-5-502. For assessment purposes, commercial and industrial real property is appraised for tax purposes infrequently,…”

Pharris v. Looper, 6 F. Supp. 2d 720 (M.D. Tenn. 1998). · cites it 2× “Tenn.Code Ann. § 67-5-502. In an affidavit provided to the Court, the former Assessor of Property, Bill Rippetoe, elaborates that “the duty of the assessor of property [is] to prepare a list of the assessed value of all properties within his jurisdiction under the guidelines of…”

Philip Dooly v. Tennessee State Bd. Of Equalization (Tenn. Ct. App. 2013). · cites it 7× “Under TCA § 67-5-502, Polk County valued the leasehold interest by a method using sales or transfers of similar interests in residential property.”

CMH Homes, Inc. v. Darrell McEachron (Tenn. Ct. App. 2005). · cites it 7× “” Tenn. Code Ann. § 67-5-502 . (Emphasis supplied).”

Philip L. Lozano, III v. Charlotte R. Sappo (Tenn. Ct. App. 2025). · cites it 4× “See Tenn. Code Ann. § 67-5-502 (d) (Supp. 2021); see also id.”

Nashville Metro Gov't v. New Orleans Manor, Inc. (Tenn. Ct. App. 2014). · cites it 2× “On October 30, 2012, Metro filed a motion for summary judgment, asserting the following ground: Because the lessee’s interest in land must be assessed against the owner of the lease, Tenn. Code Ann. § 67-5-502 (d), -605, and because Defendants failed to pursue any available…”

Creative Label, Inc. v. David Tuck, Weakley Cnty. Assessor of Prop. (Tenn. Ct. App. 2011). “The Board determined that the leasehold interest held by Creative Label was taxable pursuant to Tennessee Code Annotated § 67-5-502, and that it was not exempt from taxation under section 7-53-305.”

Alcoa, Inc. v. Tennessee State Bd. of Equalization (Tenn. Ct. App. 2011). “§ 67-5-216 or § 67-5-502? 2 The trial court stated that while two of the raw materials at issue, alumina and fluoride, could be viewed as having been manufactured by an Alcoa subsidiary, the court would not ignore the separate existence of the parent and subsidiary for purposes…”

— Tenn. Code Ann. § 67-5-502(6) — 1 case

United States v. The Metro. Gov't of Nashville & Davidson Cnty., Tennessee, 808 F.2d 1205 (6th Cir. 1987). “See Tenn.Code Ann. § 67-5-502(6) (1983). 2 A leasehold, like any other proper *1209 ty, is to be valued at “its sound, intrinsic and immediate value, for purposes of sale between a willing seller and a willing buyer without consideration of speculative values____” Tenn.”

— Tenn. Code Ann. § 67-5-502(a)(l)(2003) — 1 case

Nissan North Am., Inc. v. Haislip, 155 S.W.3d 104 (Tenn. Ct. App. 2004). “]” Tenn. Code Ann. § 67-5-502 (c)(2003). The legislative intent that leased property shall be classified and assessed according to the use of the lessee is reiterated in part nine at section 67-5-901(b).”

— Tenn. Code Ann. § 67-5-502(b) — 1 case

Colonial Pipeline Co. v. Morgan, 231 F.R.D. 518 (M.D. Tenn. 2005). “II, § 28, Tangible Personal Property, subelassification (a); Tenn.Code Ann. § 67-5-501(8)(G); Tenn.Code Ann.”

— Tenn. Code Ann. § 67-5-502(d) — 1 case

Philip Dooly v. Tennessee State Bd. Of Equalization (Tenn. Ct. App. 2013). “Under TCA § 67-5-502, Polk County valued the leasehold interest by a method using sales or transfers of similar interests in residential property.”

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