Reference Number: 
CTAS-1525

“It is a fundamental rule that all property shall be taxed and bear its just share of the cost of government, and no property shall escape this common burden, unless it has been duly exempted by organic or statute law; and that one claiming such exemption has the burden of showing his right to it.”1Pursuant to Article II, Section 28 of the Tennessee Constitution, the legislature may exempt certain types of property from taxation.

In accordance with the following provisions, all property real, personal or mixed shall be subject to taxation, but the Legislature may except such as may be held by the State, by Counties, Cities or Towns, and used exclusively for public or corporation purposes, and such as may be held and used for purposes purely religious, charitable, scientific, literary or educational, and shall except the direct product of the soil in the hands of the producer, and his immediate vendee, and the entire amount of money deposited in an individual's personal or family checking or savings accounts.2

Tennessee case law states that “this provision of our Constitution does not grant any tax exemption, does not establish any public policy of exemption, but merely authorizes, permits, the Legislature to grant exemption in the cases specified.”3Exemptions not meeting the specific requirements set out in Article II, Section 28 are not constitutionally permissible.4

Property does not become exempt from taxation because it may be difficult to assess it at its actual worth.5Moreover, exemptions in tax statutes are construed strictly against the taxpayer and in favor of the state;  and, the burden is on the taxpayer to establish the exemption.6  “The presumption is against the exemption, and exemption from taxation will not be read into a taxing statute by implication.”7However, once property has been exempted from taxation, it takes a showing of actual use for a nonexempt purpose to remove the exemption.8


     1City of Nashville v. State Board of Equalization, 360 S.W.2d 458, 594-595 (Tenn. 1962).

     2Tenn. Const., art. II, §§ 28

     3City of Nashville, 360 S.W.2d at 595-596; Book Agents of the Methodist Episcopal Church, South v. State Board of Equalization, 513 S.W.2d 514, 521 (Tenn. 1974).

     4See University of the South v. Franklin Co., 506 S.W.2d 779, 788-789 (Tenn.Ct.App. 1973).  See also Op. Tenn. Atty. Gen. 86-142 (August 12, 1986), Op. Tenn. Atty. Gen. 83-418 (December 16, 1983).

     5Pryor v. Marion County, 204 S.W. 1152, 1154 (Tenn. 1918).  However, the legislature has determined that non-business tangible personal property is assumed to have no value and a tax is not imposed on this property.  T.C.A. § 67-5-901(a)(3)(A).  The no-value presumption for non-business personal property has been upheld, based on the fact that the tax produces little revenue in relation to its administration costs, as well as the long-standing rule that the legislature may choose the method of valuation as well as whether the tax itself has any practical value.  Sherwood v. Clary, 734 S.W.2d 318, 320-321 (Tenn. 1987).

     6Feldman v. Huddleston, 912 S.W.2d 161, 163 (Tenn.Ct.App. 1995); Hearthstone, Inc. v. Moyers, 809 S.W.2d 888, 890 (Tenn. 1991); United Canners, Inc. v. King, 696 S.W.2d 525, 527 (Tenn. 1985).

     7Tennessee Farmers’ Coop. v. State ex rel. Jackson, 736 S.W.2d 87, 90 (Tenn. 1987).

     8Kopsombut-Myint Buddhist Center v. State Board of Equalization, 728 S.W.2d 327, 335 (Tenn.Ct.App. 1986).