The board unanimously approved a 2019-20 property tax rate of $0.30 per $100 of assessed value, a 4-cent increase from last year’s rate. Under the new tax levy, Belle Meade residents will pay a combined $3.05500 per $100 of assessed value to Belle Meade and Metro Nashville.
Commissioners said the city will become more dependent on local taxes as the Hall tax—a state tax on individuals and other entities with interest and dividend income from investments—is eliminated in 2022. Local taxes, which account for $1.3 million of the city’s revenue, include property taxes and public utilities property taxes, according to city documents.
Prior to the increase, the board of commissioners had not raised property taxes since fiscal year 2016-17. Mayor James Hunt was not present at the June 26 meeting.
What is the hall tax?
The Hall tax, enacted in 1929, is a state tax on interest and dividend income from investments, including investment trusts, mutual funds, corporate dividends and other forms.
According to the Tennessee Department of Revenue, three-eighths of Hall income tax collections are distributed among the city and county where the taxpayer resides. A state bill approved in 2016 decreased the rate from 6% to 5% beginning January 2017 with intent to reduce the rate 1% each year.
In Belle Meade, approximately 1,000 households pay some level of Hall tax. City officials said the Hall tax has historically accounted for more than 50% of annual revenue for Belle Meade.