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Pietrangelo Cook wins Board of Equalization dispute against Shelby County, Tennessee over interest rates

On April 19, 2011, Pietrangelo Cook prevailed in a dispute against Shelby County, Tennessee over the interest rate accruing during the pendency of property tax appeals.  The Tennessee State Board of Equalization agreed with Pietrangelo Cook attorney John Cook, that the statute pertaining to appeal-period interest was ambiguous, and that Pietrangelo Cook client Pro-Serve, Inc., should not have to pay a higher rate as a result.

Pro-Serve filed timely appeals for each of the tax years at issue, and (while those appeals were pending) Pro-Serve paid the undisputed portion of taxes.  While Pro-Serve’s underlying appeals were largely successful, Pro-Serve was still required to pay some additional taxes.  At the time of final payment, Pro-Serve maintained that it was entitled to the lower appeal rate of interest from and after the date of its payment of the undisputed portion.  The County Trustee disagreed and insisted that Pro-Serve had to pay the 18% per annum non-appeal penalty rate for the entire period that the appeals were pending, because Pro-Serve did not pay the undisputed portion prior to the delinquency date.

The State Board disagreed with the County Trustee, explaining as follows:

T.C.A. § 67-5-1512(b) relieves taxpayers of delinquency penalty and interest otherwise accruing on property taxes as to property under appeal to the county and state boards of equalization, if the taxpayer pays the full amount of the tax prior to the delinquency date or pays the undisputed portion of the tax.  The statute does not specify a due date for the latter option, and that is the issue here.  A majority of the Board finds the taxpayer should not be penalized by the statutory ambiguity, nor should we imply a date if the consequence is a penalty.

Shelby County has filed a Petition for Judicial Review of the State Board’s Decision, which is currently pending in Chancery Court.

The State Board’s Final Decision can be viewed in its entirety here.

For more information contact:
Anthony C. Pietrangelo
PH: 901-685-2662
FX: 901-685-6122