Hamilton County Trustee Bill Hullander looks to Nashville for help with business tax collection

photo Bill Hullander

Hamilton County Trustee Bill Hullander said collecting business taxes on desk chairs, computers, tractors and other personal property can be a bear. And he and other trustees are considering going to the Legislature for help.

As of June 30, there were $2.9 million in unpaid personal property taxes -- or personalty taxes -- dating back to 2009, according to trustee reports. Portions of that lump sum are owed to the county, the school system and various municipalities. And Hullander said Friday additional back taxes are owed back to 2004, but the older reports could not immediately be generated. Hullander said 99 percent of them were paid.

But at the same time, since 2009, the trustee has collected $82 million. Hullander said they collect nearly all of it, but he'd like to catch the rest.

Three of Hullander's employees were given kudos last week at the Hamilton County Commission meeting for collecting more than $267,000 of the back taxes by calling businesses in August and September. But there is still $2.7 million left uncollected. And the trustee has little recourse except to call the debtors and ask them to pay up, Hullander said.

"If someone gets behind on their real property tax, we have a tax sale. But on this, we don't really have any teeth to do something," Hullander said. "The thing we can do is place a lien on their business, but we haven't wanted to do that."

Hullander said he's talking with other trustees in the state, who may petition the Legislature to change the law.

"Right now, you can renew your business license with the state, even if you owe money [on personal property taxes]. We are thinking maybe we can work with our representatives to get that changed," Hullander said.

Rep. Gerald McCormick, R-Chattanooga, said he's all ears, and he thinks others in the delegation are ready to help, too.

"Certainly it's not fair for one group of people to pay taxes and another group of people in the same business to not pay those taxes," McCormick said. "If [the trustees] came to us with a proposal, I think we would work with them to help them however we can."

The personalty tax assessment is mainly based on the honor system, according to Hamilton County Tax Assessor Bill Bennett.

Businesses submit an inventory of their business equipment to Bennett's office, and they are assessed at 30 percent of the listed value, he said.

If businesses don't return the forms, Bennett's office "forces" an assessment, by either carrying over previous values or making an assessment based on the type of business, he said.

"We force that based on what we know about other businesses. Take a barber shop: We know about what it is for a two-chair barber shop or a three-chair barbershop, we pretty much know what that takes," Bennett said.

Contact staff writer Louie Brogdon at lbrogdon@timesfreepress.com, @glbrogdoniv on Twitter or at 423-757-6481.

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