Section 0600-05-.01 - DEFINITIONS(1) "Adjusted assessment" shall be defined as any assessment made by the assessor on personal property at a value different from the value reported by the taxpayer or based on information different from the information reported by the taxpayer for the current year.(2) "Capitalized repair" means costs that are capitalized on the taxpayer's financial books and records as a fixed asset and either:(a) Add to the value or substantially prolong the useful life of property; or(b) Adapt the property to a new or different use.(3) "Commercial and industrial tangible personal property", as defined by T.C.A. § 67-5-501(2), includes personal property such as goods, chattels, and other articles of value which are capable of manual or physical possession, and machinery and equipment which is:(a) Used essentially and principally for the commercial or industrial purposes or processes for which it is intended; and(b) If affixed or attached to real property, can be detached without material injury to such real property.(4) "Construction - in - process tangible personal property (CIP)" shall be defined as tangible personal property which as of the assessment date is undergoing construction, assembly or installation prior to being committed to use.(5) "Fair market value" of personal property shall be ascertained in accordance with T.C.A. §§ 67-5-601 and 602.(6) "Forced assessment" shall be defined as any assessment made on personal property when the taxpayer has failed to file a personal property schedule with the assessor for the current year, whether or not the assessment is the same as the previous year.(7) "Personal property", as defined by T.C.A. § 67-5-501(7), includes every species and character of property which is not classified as real property.(8) "Raw material" shall be defined as items of tangible personal property, crude or processed, which are held or maintained by a taxpayer for use through refining, combining, or any other process in the production or fabrication of another item or product. The determination of whether tangible personal property should be classified as raw material depends on the taxpayer's use of the property and not on the nature or character of the taxpayer's business. Tangible personal property may be classified as raw material in the hands of the taxpayer even if the taxpayer is not considered to be a manufacturer under other Revenue code provisions.(9) "Regular assessment" shall be defined as an assessment made on personal property when the taxpayer has filed a personal property schedule with the assessor for the current year and the assessment is based on the information reported by the taxpayer.(10) "Residual value" shall be defined as the minimum standard value of property in use or capable of use.(11) "Scrap value" shall be defined as the value of personal property no longer capable of use and for which there is no reasonable expectation of repair.(12) "Straight line depreciation" for tangible personal property shall be defined as depreciation allocated in equal percentages over the economic life of the property and shall be calculated by dividing 100% by the economic life to achieve a yearly depreciation percentage. Percent good factors, also termed depreciation factors, derived from these yearly depreciation percentages shall be rounded to the nearest whole percent.(13) "Supplies" shall be defined as expendable items of tangible personal property which are used or held for use in support of a business activity, including but not limited to office supply stocks, stocks of spare parts for maintenance of machinery and equipment, accessories used in manufacturing processes, printing supplies, and cleaning and maintenance supplies.(14) "Tangible personal property", as defined by T.C.A. § 67-5-501(12), includes personal property such as goods, chattels, and other articles of value which are capable of manual or physical possession, and certain machinery and equipment, separate and apart from any real property, and whose value is intrinsic to the article itself.(15) "Total acquisition cost" means the full acquisition cost new of personal property and includes freight, installation, set-up, and sales tax.Tenn. Comp. R. & Regs. 0600-05-.01
Original rule filed August 29, 1988; effective October 13, 1988. Amendment filed August 17, 1994; effective October 31, 1994. Amendments filed February 21, 2017; effective 5/22/2017.Authority: T.C.A. §§ 67-1-305 and 67-5-902.