## Facts

- Tennessee voters authorized a limited constitutional convention to consider changes to Tenn. Const. art. II, § 28 concerning taxation and classification of property, including real property categories of public utility, residential, farm, and industrial/commercial.
- The 1971 convention proposed, and voters later ratified, an amendment defining real property containing two or more rental dwelling units as “commercial” for ad valorem tax purposes.
- Owners of such multi-unit residential rental properties filed a declaratory judgment action challenging the amendment as beyond the convention’s authority under Tenn. Const. art. XI, § 3 and as violating federal equal protection.
- In a parallel declaratory judgment action, another multi-unit property owner raised the same challenges.
- The trial courts reached conflicting results: one invalidated the amendment; the other upheld it.
- The Tennessee Supreme Court consolidated the appeals to resolve the validity of the classification and the convention’s authority.

## Issues

1. Whether the constitutional convention exceeded the voter-approved limitation of the call by defining residential property with two or more rental units as “commercial,” allegedly creating an unauthorized additional classification of real property under Tenn. Const. art. XI, § 3.
2. Whether classifying multi-unit residential rental property as commercial for taxation violates the Equal Protection Clause of the Fourteenth Amendment.

## Decision

- The court held the convention did not exceed the limitation of the call; the amendment fell within the authorized subject of revising property tax classifications under art. II, § 28.
- The court held the classification of multi-unit residential rental property as commercial did not violate equal protection.
- The court reversed the decree invalidating the amendment and affirmed the decree upholding it, sustaining the amendment statewide.

## Legal Principles

- A constitutionally limited convention may act broadly within the subject matter approved by the electorate; internal definitions and refinements within that subject do not exceed the call so long as they remain within the authorized topic and are ratified.
- A provision assigning certain property to an existing constitutional classification may be treated as a definitional allocation within that category rather than the creation of a new category.
- Tax classifications are reviewed under deferential rational-basis principles; they are valid if any reasonably conceivable set of facts provides a rational relation to a legitimate governmental purpose.
- A state may rationally distinguish between owner-occupied residences and income-producing multi-unit rental property for ad valorem taxation and may treat the latter as more comparable to commercial activity.

## Conclusion

The Tennessee Supreme Court upheld the constitutional amendment treating multi-unit residential rental property as commercial for ad valorem taxation, concluding the convention acted within the voter-approved call to revise property tax classifications and that the resulting tax classification satisfied federal equal protection under rational-basis review.


Snow v. City of Memphis, 527 S.W.2d 55 (Tenn. 1975)