MURFREESBORO, Tenn. - A Tennessee administrative judge has ruled that 12 Rutherford County properties should be classified as residential, not commercial, reversing retroactive property tax changes that Rutherford County Property Assessor Rob Mitchell says he warned state officials were not authorized under Tennessee law. Listen to our full interview with Assessor Mitchell above this article, simply hit the play button above. 

The ruling was issued June 11 in Charlie Butler v. Rutherford County Assessor’s Office, APD Case No. 53.02-260293J. Administrative Judge Mark Garland determined that the commercial classification of the properties for tax years 2023 and 2024 should be reversed and changed back to residential.

The case centered on 12 condominium units owned by Charlie Butler, a Murfreesboro-area property owner who purchased the units as personal retirement investments. According to the order, the properties are located in Rutherford County, are subject to homeowner association restrictions limiting them to residential use, and had been classified as residential from the time Butler purchased them until assessment change notices were issued.

Those notices were sent in February 2025 after the Rutherford County Assessor’s Office, acting pursuant to a state audit finding, changed the subclassification of the properties from residential to commercial for the 2023 and 2024 tax years.

That change mattered financially. Residential property is assessed at 25% of value in Tennessee, while commercial property is assessed at 40%. The judge’s order noted that the retroactive change created an increased financial burden for Butler.

Mitchell said the reclassifications were not initiated by his office, but were directed by the Tennessee Division of Property Assessments. According to information released by Mitchell, his office issued the notices under formal protest after outside legal counsel advised that the changes were not supported by Tennessee law.

Mitchell said he sent that legal opinion to state officials in January 2025 and informed them that his office had no legal basis to make the requested changes. He said his office was then directed to proceed anyway.

Butler appealed the reclassification to the Tennessee State Board of Equalization and represented himself during an April 2, 2026, videoconference hearing. Mitchell represented the Rutherford County Assessor’s Office, with Chief Deputy Appraiser Russell Key and Commercial Appraiser John Shearron also participating on behalf of the office.

In the order, Judge Garland found that Butler had met his burden of proof. The judge determined that the appropriate subclassification for the properties was residential.

The decision reviewed several factors, including how the properties are owned, how they are used, whether they are held by a corporate entity, whether they are located together, whether they are covered by a single deed or deed of trust, and whether they are subject to restrictions. The order noted Butler owns the properties individually or with his spouse, not through an LLC or corporation, and reports the rental income on his personal tax return.

The ruling also found that income production alone is not the controlling factor when deciding whether a property should be classified as residential or commercial.

Mitchell said the decision validates the position he took more than a year ago, when he objected to the state-directed reclassifications. He also said the case raises broader concerns for other Rutherford County taxpayers who received similar notices and were forced to either pay higher tax bills or challenge the changes through the appeal process.

“This ruling settles one case, but it does not settle the larger questions,” Mitchell said in a statement. He is calling on state lawmakers to investigate how the reclassification orders occurred, determine who was responsible, and ensure affected taxpayers are reimbursed for fees and costs they should not have had to pay.

“I said from the start that these reclassifications were not legal and that my office was being forced to act against our own attorney’s advice. I was attacked for saying so. Today a judge proved I was right,” Mitchell said. “This is not about me. It is about the taxpayers of Rutherford County who were wrongly burdened by state officials who overstepped their authority. I am going to keep fighting until every one of them is made whole.”

The order is an initial decision, meaning appeal procedures remain available under state rules. If no further action is taken within the required timeline, the initial order can become final.

For Butler, the decision restores the 12 properties to residential classification for the disputed tax years. For other property owners, the ruling may provide a new basis to question similar retroactive changes.

•  Listen to our full interview with Assessor Mitchell above this article, simply hit the play button above.