April 16, 2003
Re: Ordinance no. 4 and taxation in general
Dear Mayor,
Your Management Consultant provided me with a copy of Ordinance no. 4 passed by the Board
of Mayor and Aldermen of the City in 1991, and asked whether the ordinance is valid. I have
also been asked to explain the power of the City to levy taxes in general.
Ordinance no. 4, which provides that no tax shall be levied by the City unless approved by
referendum, is invalid and should be repealed by the board. There are two reasons this ordinance
is invalid: 1) it is in direct conflict with the Charter for the City; and, 2) it is in conflict with the
general laws of the state of Tennessee.
The City Charter is a general law, mayor aldermanic charter. Section 6-2-201(1) provides that
the City has the power to “assess, levy and collect taxes for all general and special purposes on
all subjects or objects of taxation, and privileges taxable by law for state, county or municipal
purposes.” The power of the City to levy taxes is therefore only limited by the general law
provisions of the state code.
Ordinances of a city are subordinate to the charter provisions. The Supreme Court declared in
Marshall & Bruce Co. v. City of Nashville, 71 S.W. 815, 819 (Tenn. 1903):
The provisions of the charter are mandatory, and must be obeyed by the city and its
agents; and, if in conflict with an ordinance, the charter must prevail. (Emphasis added)
The ordinance is therefore invalid, and cannot be relied upon by the City or its residents to limit
the power of the City to levy and collect taxes.
The ordinance is also invalid due to its conflict with the general laws of the state. In Tennessee,
there “is no right to hold an election, including a referendum, absent an express grant of power
by the legislature.” McPherson v. Everett, 594 S.W.2d 677, 680 (Tenn. 1980). The ability to
decide issues through referendum is quite limited. Those matters which may be submitted to the
voters through referendum are specified in statutes, and include decisions to legalize sales of
liquor by the drink and to adopt a home rule charter under the Tennessee Constitution. There is
no provision in the tax code which permits a referendum.
I hope this information is helpful.
Thank you for consulting with MTAS.
Sincerely,
Melissa A. Ashburn
Legal Consultant