Property Exemptions

Religious, charitable, scientific or nonprofit educational institutions may apply to have property owned by that organization exempt from property taxes if the property is currently being used exclusively to carry out one or more of the purposes for which the organization was created.

This can include allowing another exempt institution to use the property for a purpose for which that organization was created, provided the owning institution receives no more than one dollar ($1.00) in rent per year (the owner may receive a reasonable fee for maintenance and service). The three key provisions are:

• Owned by a religious, charitable, scientific or educational institution
• Currently being used for a purpose for which that organization exists.
• The owning organization must apply to the State Board of Equalization and receive approval in writing.

The primary consideration is “current use”. For example, if a church buys a vacant site with the intention of building a new church there in the future, the property would not be able to be exempted until the new building is completed and ready for use.

Applying for Exemption

Exemption application forms and instructions for completing them are available in the Assessor of Property Office. After the form is filled out by the requesting institution, one copy is filed with the State Board of Equalization for a decision and the other is filed with the Assessor of Property. All applications and supporting documentation should be filed by May 20th of the tax year for which the exemption is being sought. A separate application must be filled out for each parcel of property being requested for consideration. Copies of the following documents should accompany the organization’s application to the State Board, as well as the copy filed with the Assessor:

• Deed of Ownership
• Articles of Incorporation (if applicable)
• Organization’s By Laws (if applicable)
• I.R.S. Tax Exempt Letter
• Income and Expense Statement or I.R.S. Information Return
• Photograph(s) of the property

After receiving the application and other documentation, the State Board of Equalization will notify both the owner and the Assessor of Property in writing when a decision is reached in reference to the exemption of the property. That notification will also state the date the exemption is to be effective.

For more information or assistance in completing the application for exemption Contact Us at the Assessor of Property Office or the State Board of Equalization.

Associated Fees for Filing Property Tax Exemption Application with State Board of Equalization

Persons filing applications for property tax exemptions at the State Board of Equalization must now pay a non-refundablefee to defray part of the cost of processing applications at the state level. The fee is proportionate to the total appraised value [land and structure(s) as determined by the County Assessor of Property] of the property being considered for exemption as follows:

To view further details associated with the tax exemption application filing fees please visit the Tennessee State Board of Equalization website.

Frequently Asked Questions

What type of organizations are eligible for exemption from property taxation ?

Religious, charitable, scientific or nonprofit educational institutions may apply to have property owned by that organization exempt from property taxes if the property is currently being used exclusively to carry out one or more of the purposes for which the organization was created.

This can include allowing another exempt institution to use the property for a purpose for which that organization was created, provided the owning institution receives no more that one dollar ($1.00) in rent per year (the owner may receive a reasonable fee for maintenance and service). The three key provisions are:

• Owned by a religious, charitable, scientific or educational institution.
• Currently being used for an purpose for which that organization exists.
• The owning organization must apply to the State Board of Equalization and receive approval in writing.

Wouldn’t any property owned by a tax exempt organization be automatically exempted from property taxes?

Not necessarily. The primary consideration is “current use”. For example, if a church buys a vacant site with the intention of building a new church there in the future, the property would not be able to be exempted until the new building is completed and ready for use. And even then, if the site were several acres in size and only a portion of the land was being used for the actual church buildings, parking lots, athletic fields, etc., the excess land may still be taxable until it also is put to a use that would warrant exemption.

How does an organization apply for exemption ?

Exemption application forms and instructions for completing them are available in the Assessor of Property Office. After the form is filled out by the requesting institution, one copy is filed with the State Board of Equalization for a decision and the other is filed with the Assessor of Property. All applications and supporting documentation should be filed by May 20th of the tax year for which the exemption is being sought. A separate application must be filled out for each parcel of property being requested for consideration.

What documents or other material should be provided with application ?

Copies of the following documents should accompany the organization’s application to the State Board, as well as the copy filed with the Assessor:

• Deed of Ownership
• Articles of Incorporation (if applicable)
• Organization’s By Laws (if applicable)
• I.R.S. Tax Exempt Letter
• Income and Expense Statement or I.R.S. Information Return
• Photograph(s) of the property

After the exemption is approved, how often is the property owner required to update the record or re-apply?

Once an exemption is approved it is not necessary to reapply each year. If there are changes, however, in the ownership or use of the property which might affect the property’s exempt status, it is the organization’s responsibility to promptly notify both the Assessor of Property and the State Board of Equalization.