Tenn. Comp. R. & Regs. 0600-05-.06 - STANDARD VALUATION

(1) In the absence of evidence to the contrary, the fair market value of commercial and industrial tangible personal property, except raw materials, supplies, and scrap property, shall be presumed to be either the total acquisition cost less straight line depreciation or the residual value, whichever is greater. The grouping of personal property and the depreciation allowed for each group shall be consistent with the schedule prescribed in Rule 0600-05-.11 below, and shall be based on a reasonable economic life for that group of items.

(2) The fair market value of raw materials and supplies shall be presumed to be their total acquisition cost as determined by the "first-in-first-out" (FIFO) method of accounting, in the absence of evidence to the contrary.

(3) The residual value of personal property shall be presumed to be twenty percent (20%) of total acquisition cost, in the absence of evidence to the contrary.

(4) The scrap value of personal property shall be presumed to be two percent (2%) of total acquisition cost, in the absence of evidence to the contrary.

(5) In making forced assessments on non-reporting accounts, the following factors shall be considered:

(a) Previous data on file for that account;

(b) Data from comparable accounts;

(c) Data collected during any field visits.

(6) Any tangible personal property which the taxpayer claims or will claim as CIP for federal income tax purposes based on the status of the property on the assessment date for property taxes may be reported by the taxpayer as CIP for property tax purposes. The value of CIP shall be presumed to be fifteen percent (15%) of all direct and indirect costs incurred and claimed by the taxpayer for federal income tax purposes as of the assessment date. The value of qualified pollution control equipment, whether or not reportable as CIP, shall be governed by T.C.A. § 67- 5-604.

Notes

Tenn. Comp. R. & Regs. 0600-05-.06

Original rule filed August 29, 1988; effective October 13, 1988. Amendment filed May 31, 1991; effective July 15, 1991. Amendment filed August 17, 1994; effective October 31, 1994. Amendments filed February 21, 2017; effective May 22, 2017. Amendments filed May 12, 2020; effective 8/10/2020.

Authority: T.C.A. §§ 4-3-5103, 67-1-305, 67-5-902, and 67-5-903.