Tax appeals could set bad precedent

It is good to see officials with the city of Memphis, which has a serious debt problem and a shaky revenue stream, get creative about seeking new sources of revenue.

In what has been described as an unusual move, the city has appealed nearly 200 tax assessments on commercial properties that could add another $2 million annually to the city’s bank account.

Homeowners who think their property taxes are too high probably are thinking, “Good for the city. Everyone should pay their fair share.”

That is one way to look at it. However, this also could open up a can of worms, especially since the assessments are based on the appraised value of the property.

The Shelby County Assessor’s Office has a reliable formula for determining those values, but thousands of citizens still file appeals with the Shelby County Board of Equalization, challenging their property appraisals.

And appraisals can be sticky wickets because property values are underpinned by what a willing buyer is willing to pay a willing seller at a given point in time — which explains the thousands of appeals.

Allan Wade told The Commercial Appeal’s City Hall reporter Ryan Poe he filed the last of the appeals with the Board of Equalization hours before deadline Tuesday.

We do not think Taylor Caruthers, of Memphisbased tax consulting firm Caruthers & Associates, was exaggerating when he told Poe that the appeals are sure to anger some of the property owners and that the move was bad for business.

We also might add that the appeals seem a bit of a contradiction when other companies are receiving tax breaks.

Wade said the city is only appealing assessments for commercial and industrial properties with sales values above their assessed values, which would total about $2 million. In many cases, he added, those properties are owned by out-of-town companies that swooped in to buy cheap after the recession, and the city would be negligent not to appeal.

We see his point, and we give the city a pat on the back for trying to garner new revenue. Still, we can understand why the move could leave a bad taste in the mouths of local business owners and have negative blowback on economic development prospects.

Board of Adjustment members carefully weigh all appeals, but they may want to pay particular attention to the ones filed by the city because of the possible precedent-setting ramifications.