TSC holds collecting additional privilege taxes based on additional square footage is prohibited

HOME BUILDERS ASSOCIATION OF MIDDLE TENNESSEE, ET AL. v. WILLIAMSON COUNTY, ET AL. (Tenn.Ct.App. February 25, 2010)

This appeal involves a question of law concerning the interpretation of the Williamson County Adequate Facilities Tax Act, which imposes a privilege tax based upon the gross square footage of new construction in Williamson County. In 2005, the County notified certain builders of new residential construction that a review for the period from January 1, 1998, through December 31, 2003, indicated that the builders owed an additional amount of privilege tax because the actual square footage of the completed construction was greater than the projected square footage at the time the privilege tax was paid. The builders objected to payment of the additional privilege tax and filed an action for declaratory judgment, contending that the County's belated collection attempts were in derogation of the Act.

The trial court granted summary judgment in favor of the County, and the Court of Appeals affirmed. We accepted this case for review to determine whether, after the privilege tax is paid based upon the projected square footage of new development before construction, the County is authorized to collect an additional privilege tax after construction based upon the actual completed square footage. We hold that after the County collects the privilege tax based upon the projected square footage, the language of the Act prohibits the County from later collecting additional privilege taxes based upon the actual square footage of the completed project. Accordingly, we reverse the judgment of the Court of Appeals, vacate the trial court's grant of summary judgment in favor of the County, grant summary judgment in favor of the builders, and remand to the trial court for further proceedings as necessary.

The full text of this opinion may be found on the TBA website at:
http://www.tba2.org/tba_files/TSC/2010/homebuilders_022510.pdf

A dissenting opinion may be found here:
http://www.tba2.org/tba_files/TSC/2010/homebuilders_diss_022510.pdf

Court examines County's right to collect overlooked privilege taxes

HOME BUILDERS ASSOCIATION OF MIDDLE TENNESSEE v. WILLIAMSON COUNTY, ET AL. (Tn. Ct. App. October 10, 2008)

Appellants, a group of homebuilders, appeal the trial court's grant of summary judgment in favor of Appellee Williamson County. Homebuilders filed a complaint for declaratory judgment against Williamson County, seeking interpretation of Chapter 118 of the Private Acts of 1987 as amended. Under the alleged authority granted by the Act, Williamson County levied additional adequate facilities taxes on homebuilders based upon its audit of actual square footage built. Builders contend that Williamson County exceeded its authority under the Act by calculating taxes at the time of the issuance of the certificate of occupancy as opposed to the time the building permit was issued. Finding that the Legislature intended to give the County broad authority to levy its tax at the time of the issuance of the building permit or at the time of the issuance of the certificate of occupancy, we affirm.

Opinion may be found at the TBA website:
http://www.tba2.org/tba_files/TCA/2008/homebuilders_101008.pdf