As Nashville businesses decry rising tax bills, lawmakers consider a cap on increases

Businesses in Nashville are sounding the alarm: higher property tax bills are threatening their existence.

This comes on the tail of last year’s property reappraisal, which saw a median value increase of 45% countywide, leaving many with drastically higher tax bills. Now, a coalition of more than 100 local businesses have banded together to make requests of Nashville’s mayor and property assessor.

The coalition features many unique-to-Nashville names: including the owners of Turnip Truck, Bongo Java, 3rd and Lindsley, Otaku Ramen, and Acme Feed and Seed, among others. The effort is led by Christian Paro, owner of co-working space Center 615, who says the motivation comes from a personal place.

“I couldn’t actually afford my tax bill,” Paro said. “And I consider myself a 21-year resident of Nashville who pays his taxes.”

The requests

Many business owners have entered into the appeals process, protesting their property valuations. The coalition’s requests center on that process: including asking it to move faster by expanding the Board of Equalization (which considers property assessments and appeals). The group is also asking that the board use an “income-based approach reflecting reasonable rental rates and cap rates that mirror actual operating conditions, rather than speculative redevelopment assumptions.”

In response to the requests, Davidson County Property Assessor Vivian Wilhoite pointed to the “limits of [her] authority.”

“While we understand the concerns expressed by property owners navigating the appeals process, certain requests outlined in the proposal, such as payment adjustments or temporary payment extensions tied to pending appeals, are matters that fall outside the statutory authority of the Assessor of Property’s Office,” Wilhoite wrote in a statement to WPLN News.

The mayor’s office is working on some of the coalition’s requests. Just this week, more “alternates” were appointed to the Board of Equalization, an effort to ensure that there are enough members present to keep hearings moving.

But, in comments to reporters, Mayor Freddie O’Connell has returned to what he sees as the reason taxes are going up: property in Nashville is worth more.

“The toughest thing about our growing, vibrant, dynamic city is that you do see parts of the city where properties values increase,” O’Connell said last week. “And I guess I just keep coming back to — the only time when property taxes are increasing right now is if their property values have increased substantially.”

But business owners like Paro take issue with the idea that values going up at this rate is beneficial: he says many are feeling pressure to either sell, or pass on the costs to tenants or customers.

“Indirectly, both the assessor and the mayor’s office seem to be communicating ‘You should just sell your building because it’s worth more’,” Paro said. “You’re advocating that they just sell and make some money and move on … There’s a lot of businesses out there, whether tenant or owner-operator, that would like to continue serving the neighborhoods in which they exist.”

Peter Kurland, owner of Dark Horse Theater, echoed similar sentiments on This Is Nashville last week.

“Those building valuations don’t mean anything unless we want to sell the building,” Kurland said. “What we really want to do is continue operating it as a theater. And right now, the property tax alone is more than the entire annual budget for our theater group. And I just don’t know how you think arts organizations can survive if the property values are created the way they are and the taxes go up so fast.”

In response, O’Connell indicated the state government is in charge of many the programs that can provide property tax relief. These are largely limited to older, lower-income populations, veterans, or people with disabilities.

State intervention

The state government is a key player in the taxation conversation — and, currently, lawmakers are looking to put a cap on how localities increase property taxes.

There are multiple bills this session. One bill, sponsored by Sen. Bo Watson and Rep. Jason Zachary, has gotten support from House Speaker Cameron Sexton, and cleared an early hurdle this week in the House Cities and Counties Subcommittee.

Watson says a cap is necessary to give home and property owners a sense of “predictability.”

“By not having any kind of limitation on local government ability to raise taxes, homeowners and other property owners have no idea what their taxes might be in a reassessment,” Watson said. “When you live in a state that everybody wants to move to and live in, property values are going up, and it creates even more of a need to have some level of predictability.”

In it’s original state, the bill proposed a property tax increase cap of 2% over inflation. Watson says he’s open to adjusting that, so it could work for more localities. And, on Wednesday, Zachary advanced an amendment in the House that raised the cap to 3%.

“I’m open to that dialogue,” Watson said. “What I’m interested in is getting into statute a construct that says, ‘We’re gonna put a limit on how much property taxes can go up.’ ”

Local concerns

Property tax is a critical part of local budgets — especially in a rapidly growing place like Nashville. The mayor’s office said that last year’s increase merely allowed it to keep pace with inflation, but stopped short of expanding services.

“I’ve talked to mayors at both city and county level across the state of Tennessee and there is broad consensus that [Watson’s bill] would be devastating to local governments in the way that it’s framed right now,” O’Connell told reporters last week. “We are hoping that it does not pass.”

Leaders from the Tennessee Municipal League and Tennessee County Services Association testified against the bill this week in a House subcommittee hearing.

“Other than Sevier [County], property tax is the largest source of revenue for county governments,” said David Connor, executive director of TCSA. “It’s where they’re able to go for the sources of revenue they need to pay: teacher salaries and pay sheriff’s deputies and fund the jail and fund our operations, fund ambulances, EMS, fire, you know, all those types of services that we are required to provide and, in many cases, you all [the Tennessee Legislature] mandate that we provide.”

Chad Jenkins of the Tennessee Municipal League told lawmakers that property tax is especially important because of restrictions the General Assembly has placed on the other significant revenue stream — the sales tax.

“The sales tax is already capped and we only get less than 50 cents on the dollar from each dollar we collect from the sales tax,” Jenkins said. “Because the other half you’ve obligated somewhere else.”

Watson says this mentality isn’t a surprise.

“All the people that tend to be against this are all representing government, not representing the individual citizen,” he said. “I think individual citizens support the concept.”

Christian Paro, with Center 615, says the coalition is not asking for property taxes to go away. He budgets for them every year. But he does say that the last two cycles have caught him and others off guard in a way that could risk closures.

“I feel like it’s local, cool, weird businesses that make neighborhoods and cities cool,” Paro said. “I could go to a Cheesecake Factory anywhere. But can I go to Bongo Java anywhere? No.”

Debate over these policies will continue — at both city and state levels — in the coming weeks. Watson’s bill is on the calendar to be heard by a House Committee on March 11.

In the meantime, businesses say the clock is ticking: local staples are at risk of disappearing.

Clarification: The median value increase in the 2025 property appraisal was 45%. An earlier version of this story referred to the average change.