Memphis and Shelby budget proposals include property tax cuts as a result of the reappraisal appeals allowances, for which the two governments sought and received state approval last year, being too high.

The county’s appeals allowance was 11.5 cents on the property tax rate while Memphis’ allowance was 6.96 cents. According to a state report based on Shelby County Assessor numbers, the county allowance proved to be 6 cents too high and the city allowance was 1.1409 cents too high.

In collecting taxes, the city Treasurer’s Office can extend the certified tax rates and recapture rates out several decimal points. However, county officials say that in producing tax bills the Shelby County Trustee’s Office does not have the ability to extend the rates beyond two decimal places.

The certified and recapture rates are designed to make reappraisal programs financially neutral and prevent large governmental windfalls. Governments can raise tax rates above certified and recapture rates by advertising a public hearing and afterward voting to approve a tax increase.

The property tax rates being discussed by government officials are a county rate of $3.39 for each 100 of assessed value and a Memphis rate of $2.701640. The current rates are $3.45 and $2.713049.

The county will get to keep the more than $12 million it received in 2021 tax year revenue from the excessive 6 cents in appeals allowance but under the rate cut in the recapture rate, that revenue will not occur this year. Similarly, Memphis will get to keep the 2021 revenue from the excessive city allowance but that revenue will not continue this year.

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