Scorecard Final (053111)

8/6/2019 Scorecard Final (053111)

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The Best and Worst ofProperty Tax Administration

COST Scorecard on State Property Tax

Administrative Practices

Fredrick J. Nicely May 2011

Douglas J. Turner

e Council On State Taxation(COST) is the premier statetax organization representingmultijurisdictional taxpayers. COSTis a nonprot trade organizationconsisting of nearly 600 multistatecorporations. COSTs mission is to

preserve and promote equitable andnondiscriminatory state and local

taxation of multijurisdictional businessentities.

2011 Council On State Taxation(COST)

122 C Street NW, Suite 330Washington, DC 20001Phone: 202.484.5222www.cost.org

Fred Nicely is COSTs Tax Counsel and the staf member assigned to assist COSTsProperty Tax Committee. He is ormerly Chie Counsel to the Ohio Departmento Taxation. Doug Turner is Director o Property Taxes or the General ElectricCompany and serves as chair o the COST Property Tax Committee.

ExEcuivE Suy

Fair property tax administration is critically important to both individual and busi-ness taxpayers. From an individual perspective, the property tax is oten identied asthe most hated tax,i surpassing both the income tax and the sales tax in taxpayerslow estimation. While much-reviled, however, it is unlikely to go away anytime

soon since the property tax provides approximately 65% o local school revenues.iiBecause state and local jurisdictions rely so heavily on the property tax, it is essentialor state legislators and tax administrators to ensure the tax is administered airlyand without perceptions o bias or undue administrative burdens. Taxpayers aremuch more willing to airly and ully comply with a property tax system perceivedas unbiased, equitable and ecient.

Over the last 100 years, the property tax has gradually shited rom a tax generallyimposed at the state level (accounting or 43% o state revenue in the early 1900s),to circumstances today where 98% o the property tax is imposed at the local levelaccounting or over 70% o revenues or local governments.iii Property taxes todayaccount or less than two percent o state revenues.ivBecause o the potential bur-dens on businesses caused by this decentralization, it is vital or state governments

to oversee the operations o local assessors to ensure property taxes are uniormlyand airly assessed.v Viewed rom the business communitys perspective, propertytaxes comprise ully 36.5% o the total state and local tax burden imposed on busi-ness or FY 2009, ar exceeding all other taxes imposed on businesses by state andlocal jurisdictions.vi is equates to $215.3 billion in property taxes annuallyanamount which, contrary to current economic trends, continues to steadily increase

year to year.vii Indeed, a recent study noted that the District o Columbia, Florida,Indiana, and New Mexico were ound to have increased property tax collections byover 10% annually (on a per capita basis) rom scal year 2007 to scal year 2008.viii

is Scorecard evaluates the ollowing characteristics o state and local propertytax systems that in our view represent air property tax administration on a state bystate basis:

A air property tax system must have standardized ling, remittance and appealprocedures throughout the state;


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e appeal process or property tax disputes must be beorean independent tribunal, in a de novo hearing, without apay-to-play requirement or disputed property taxes; and

e property tax burden must be balanced and uniormand not shited onto business taxpayers.

is scorecard complements other scorecards COST has issuedto evaluate state administrative tax practices. COST recently

updated e Best and Worst o State Tax Administrationscorecard in February, 2010. Additionally, COST has evalu-ated state unclaimed property laws rom the property holdersperspective in e Best and Worst o State Unclaimed Prop-erty Laws. is Scorecard, e Best and Worst o Property

Tax Administration, specically addresses state property taxadministrative practices, taking into account the act that prop-erty taxes are administered at both the state and local govern-ment level. Similar to the prior scorecards, this Scorecard ranksobjective procedural practices o state and local property taxadministrative practices. Strong oversight rom the state (usu-ally the states chie tax authority) is desirable or the portion othe property tax administered locally.

p 5 ad Bttm 5 aked States:

Top-Ranked States Bottom-Ranked States

State GradeMaryland A-

Florida B+

Georgia B+

Kentucky B+

Oregon B+

State GradeNew York F

Delaware D-

Illinois D-

Pennsylvania D-

Hawaii D

inoucion

COST is a non-prot trade organization that representsnearly 600 multistate corporations engaged in interstate andinternational businesses. is Scorecard promotes COSTsmission statement o preserving and promoting equitableand nondiscriminatory state and local taxation o multi-ju-risdictional business entities.

In 2008, COST ormed a Property Tax Task Forceix ocusedon eforts to improve state and local administration o prop-erty taxes. One o the initial goals o the Task Force wasto develop a COST policy statement on air and equitableproperty tax administration. In October, 2008, the COSTBoard adopted the Task Forces recommendations. at pol-

icy statement reads as ollows:

Position: State and local property tax systems must be airlyadministered and tax burdens equitably distributed amongtaxpayers. A property tax system that is inecient or thatdisproportionally alls upon business is not equitable and willnegatively impact a states business tax climate.

Uniorm Tax Base and Rates A property tax base dis-proportionally comprising business property is not bal-anced. e tax rates imposed on property used or busi-ness purposes should not signicantly difer rom the taxrates imposed on property used or residential purposes.

e market value and assessed value ratios or businessand residential property should also be similar. Further-more, intangible property, such as trade names, customerrelationships and goodwill, should not be included in theproperty tax base because such property is associated only

with the management o business, and the measuremento such value is extremely subjective. Finally, wholesaleexemptions o property used or residential purposes and

articial caps that do not equally apply to property usedin business are inherently unair and scally unsound.

Ecient Filing Procedures e ormat and ling duedates or property tax returns, including requests orsupplemental inormation and extensions, should be uni-orm across the State and allow enough time or propercompletion ater the valuation lien date. Taxpayersshould be provided sucient time to review assessments(e.g., 60 days) so as to minimize the number o protec-tive appeals that are led. Streamlined procedures shouldbe provided or property owners to obtain exemptions.A statewide valuation methodology that is conducted in

accordance with Uniorm Standards o Proessional Ap-praisal Practice (USPAP) and updated on a regular basisto actor in changes in value, including depreciation andall orms o obsolescence, should be utilized. An ecientproperty tax system should also utilize modern electronicling methods and provide or exclusions rom reportingand paying tax on de minimis amounts o property.

Centralized Review and Uniorm Appeal Procedures I property tax returns are led locally, a central agencyshould review and have oversight over localities propertytax procedures. Appeal procedures and dates or prop-erty tax valuations should be uniorm across the state.Decisions o local property tax review boards should besubject to a de novo review by an independent tribunal,preerably one that has statewide jurisdiction and an ex-pertise in property taxation.

Tax Payment Requirements on Contested Valuations Local governments and other beneciaries o propertytaxes can sufer signicant harm when valuation disputeslead to substantial reunds o property taxes that have al-ready been appropriated. Ideally, taxpayers should onlyhave to pay the tax on the undisputed value or only ona portion o the contested value o the property. Alter-natively, when a signicant amount o tax is in dispute,such amounts should be kept in escrow to minimize the

harm to the beneciaries o the tax should the taxpayerprevail in the dispute. At the bare minimum, i a reducedpayment or escrow is not allowed, the beneciaries o thetax must be notied o the dispute to ensure the disputedtax revenue is used prudently. Any interest charged mustapply equally to overpayments and underpayments.

Many o the issues identied in this Scorecard are based onconcerns raised by the Appraisal Foundation, an entity au-thorized by Congress. e Appraisal Foundation is a non-prot organization with two boards: the Appraiser Quali-cation Board, which establishes minimum education and


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experience requirements or appraisers, and the AppraisalStandards Board, which issues the Uniorm Standards oProessional Appraisal Practice (USPAP).

COSTs evaluation is also consistent with the statement ovalues promulgated by the International Association o As-sessing Ocers (IAAO) upon which its Code o Ethicsis based.x e IAAO is a nonprot organization o govern-

ment assessment ocials and others interested in the ad-ministration o property taxes, with a mission o promotinginnovation and excellence in property appraisal, assessmentadministration and property tax policy. e ollowing arethe IAAOs values: 1) Commitment to the improvement othe property tax system worldwide; 2) Accountability to thepublic good; 3) Commitment to excellence in assessment ad-ministration beyond property tax; 4) Respect or the worthand dignity o all individuals; 5) Promotion o inclusive-ness, airness and diversity; 6) Obligation to organizationaltransparency, integrity and honesty; 7) Practice o respon-sible stewardship o resources; and 8) Dedication to excel-lence and maintaining the public trust. e IAAO has also

published a book addressing the Fundamentals o Tax Policythat notesfairness, equity and uniformity should predominatein a good property tax system.xi

Te coS Std: Highlighting the scope o the compli-ance burden, the COST Property Tax Task Force conducteda benchmarking study to determine i COST members hadsignicant diferences with how they complied with thestates property tax laws. In summarizing the data rom thebenchmarking study, 32 COST members participated, in-dicating they have a property tax ling responsibility in anaverage o 38 states, with the smallest respondent having aling responsibility in seven states. Most COST members

responding to the benchmarking survey (40%) indicatedthey had a ling responsibility in over 45 states. oseCOST members also reported paying over $3.5 billion inproperty taxes annually, split roughly 50/50 between real andpersonal property tax. To remit those taxes, those COSTmember companies are required to process over a quarter oa million tax bills or payment. Nine companies in the studyprocessed over 10,000 property tax bills per year. Lastly, thebenchmarking study ound that COST members were au-dited on a regular basis. e average number o property taxaudits aced by COST member respondents was 24 per year.

For this initial Scorecard, both real and personal propertyare addressed together, along with properties that are cen-trally assessed (e.g., many public utilities). In general, mostreal property is assessed at the local level. States vary on

where the personal property tax is administered. Some statesadminister it locally, some completely at the state level andother states use a combination o both. Many public utilities,including ormerly regulated entities, have all their propertytax administered at the state level. Miscellaneous propertytaxes imposed on certain types o property, such as motor

vehicles, are outside o the scope o this Scorecard.

is Scorecard ocuses on objective actors in evaluating astates property tax administrative practices. Objective eval-

uations are primarily based on state and local governmentlaws and regulations. Subjective issues with various stateand local assessors and their practices are not the ocus othis Scorecard. ose subjective evaluations can changeover time depending on who is the acting tax assessor ina jurisdiction; and are oten inuenced by the relationshipa company and/or industry has with respective assessors.

e use o objective criteria comports with COSTs goal

in issuing this surveyto provide the states with issuesthey can change legislatively (or by rulemaking) in orderto improve property tax laws to achieve a airer and moreequitable property tax system. is Scorecard does not o-cus on the advantages (e.g., relative ease o locating taxablereal property and revenue stability) or disadvantages (e.g.,payment not directly tied to increase in wealth or income)to state and local governments using property taxes as arevenue source as compared to other taxes.

PoPEy x ScoEc

is Scorecard evaluates multiple criteria lumped into three

primary subject areas: 1) Standardized Procedures; 2) FairProperty Tax Appeal Procedures; and 3) Residential Prop-erty Tax Burdens vs. Business Property Tax Burdens. We alsoinclude an Other Issues component to address issues notspecically addressed in one o the primary groups. A de-tailed explanation o each subcategory is included ater thescoring table later in this report.

Stadardzed Predres.is group contains ve subcat-egories:

1) Statewide standardized due dates or all property tax l-ings and payments;

2)

Statewide use o standardized orms (very importantwhen businesses are required to le reports with localjurisdictions o a state) and oversight by a state agency;

3) Reasonable real property tax evaluation cycles (everytwo to three years);

4) Exclusions or de minimis property values and/or bills;and

5) Equal interest rates applied to assessments o additionaltax due and any tax overpayments.

Far Prpert a ppeal Predres.is next group con-tains our subcategories, the essential elements o air prop-

erty tax appeal procedures. e subcategories are:1) e initial appeal deadline must be air and reasonable

(at least 60 days);

2) e burden o proo to sustain an appeal must be rea-sonable;

3) De novo review beore an independent tribunal must beavailable ater completion o any administrative reviewat both the state and the local level; and

4) e disputed portion o the property tax should be es-crowed or partial payment o the tax should be allowedin the event o a dispute.


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esdetal Prpert a Brdes . Bsess Prpert a Brdes.is last group contains three subcategoriesand considers whether the property tax burden is neutralor unduly burdens business property more than residen-tial property. e ollowing actors were considered in thisgrouping:

1) Assessment ratios on various types o property;

2) Tax assessment caps; and3) Equal property tax burdens.

e ocus on equal property tax burdens is based on whetherthe overall tax burden imposed on the business sector isgreater than that imposed on residential property in the state(i.e., the ocus is not on miscellaneous property tax exemp-tions narrowly targeted at certain owners o residential prop-erty). As stated in a Policy Focus Report published by theLincoln Institute o Land Policy: e evidence shows that limits on assessed values, while avored by many home-owners, are a deeply awed means to counter rising propertytaxes and By severing the connection between property val-

ues and property taxes, assessment limits impose widely di-ering property tax obligations on owners o identical prop-erty; reduce economic growth by distorting taxpayer decisionmaking; and greatly reduce the transparency and account-ability o the property tax system as a whole.xii

other isses. Certain issues with respect to state adminis-trative property tax practices do not t within the previouscategories. COST members and practitioners were asked toidentiy additional problems with a states property tax ad-ministration that were not directly addressed in one o thespecic categories. Note that this Scorecard does not directlyaddress specic valuation issues related to certain industries

(such as public utilities, including entities ormerly regu-lated as public utilities). However, where appropriate, pointsare given to those states that inequitably include intangibleproperty in the valuation o these entities when such prop-

erty is excluded rom property taxation or all other types obusinesses (including residential properties).

Grading the Surveyxiii

Point totals were determined or each subcategory rom theabove groups using a 0 to 4 grading system. e higher thescore, the more the states property tax practices deviate romCOSTs recommendations or a air and ecient property

tax system. One point was assigned to each issue listed in theOther Issues category contained in the General Inormationsection o the Scorecard. No other grading was included in theGeneral Inormation portion o the Scorecardthat inorma-tion is provided solely or inormational purposes.

e ollowing scale was used or the nal grading o thescorecard:

Grade

StandardizedProcedures

(max 20 points)

Fair TaxAppeal

Procedures(max 16 points)

Residentialv. BusinessProperty(UnfairBurden)

(max 12 points)

Total Score

A 0 to 4 0 to 3 0 to 1 0 to 11

B 5 to 10 4 to 5 2 to 4 12 to 20

C 11 to 15 6 to 10 5 to 6 21 to 31

D 16 to 18 11 to 13 7 to 10 32 to 38

F Above 18 Above 13 Above 10 Above 38

Summary Results

e summary table on Page 5 ranks each states results in

complying with the subcategories described above. More de-tailed inormation is provided below and the survey resultsare provided or each grouping beginning on page 10 o thissurvey.


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State

StandardizedProcedures

Fair Tax AppealProcedures

Residential v. BusinessProperty

OtherIssues Total Score

Points(Max. 20) Grade

Points(Max. 16) Grade

Points(Max. 12) Grade Points Points Grade

AL 8 B 6 C+ 10 D 1 25 C-

AK 15 C- 11 D 3 B 1 30 C-

AZ 9 B- 8 C 9 D 0 26 C-

AR 7 B 8 C 3 B 1 19 B-CA 8 B 11 D 4 B- 2 25 C-

CO 0 A 9 C 9 D 2 20 B-

CT 15 C- 6 C+ 4 B- 1 26 C-

DE 20 F 10 C- 4 B- 1 35 D-

DC 6 B 9 C 11 F 1 27 C-

FL 6 B 3 A- 5 C 0 14 B+

GA 3 A 3 A- 5 C 2 13 B+

HI 17 D 8 C 9 D 0 34 D

ID 12 C 7 C 3 B 0 22 C+

IL 17 D 9 C 8 D 1 35 D-

IN 12 C 5 B- 7 D 1 25 C-

IA 10 B- 9 C 10 D 2 31 C-KS 7 B 8 C 7 D 1 23 C

KY 7 B 6 C+ 1 A 1 15 B+

LA 13 C 9 C 8 D 2 32 D

ME 15 C- 5 B- 4 B- 1 25 C-

MD 1 A 6 C+ 3 B 1 11 A-

MA 11 C+ 5 B- 8 D 1 25 C-

MI 6 B 8 C 6 C- 0 20 B-

MN 11 C+ 5 C 7 D 0 23 C

MS 6 B 12 D 6 C- 2 26 C-

MO 11 C+ 5 B- 7 D 2 25 C-

MT 10 B- 11 D 8 D 2 31 C-

NE 9 B- 9 C 1 A 1 20 B-NV 8 B 13 F 4 B- 1 26 C-

NH 14 C 4 B 0 A 1 19 B-

NJ 16 D 8 C 4 B- 3 31 C-

NM 11 C+ 8 C 6 C- 0 25 C-

NY 20 F 10 C- 10 D 3 43 F

NC 10 B- 6 C+ 0 A 3 19 B-

ND 9 B- 12 D 3 B 0 24 C

OH 7 B 6 C+ 6 C- 1 20 B-

OK 5 B+ 4 B 7 D 2 18 B

OR 6 B 4 B 2 B+ 1 13 B+

PA 19 F 8 C 6 C- 3 36 D-

RI 15 C- 10 C- 7 D 0 32 DSC 12 C 3 A- 11 F 1 27 C-

SD 9 B- 8 C 4 B- 1 22 C+

TN 11 C+ 9 C 6 C- 1 27 C-

TX 7 B 3 A- 6 C- 3 19 B-

UT 3 A 7 C 5 C 2 17 B

VT 9 B- 10 C- 2 B+ 1 22 C+

VA 18 D 8 C 2 B+ 0 28 C-

WA 10 B- 9 C 1 A 1 21 C+

WV 9 B- 12 D 6 C- 1 28 C-

WI 11 C+ 12 D 3 B 0 26 C-

WY 11 C+ 4 B 3 B 1 19 B-


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SPEciFic ciEi uSE Fo FiPoPEy x iniSion

Standardized Procedures

e state-by-state detail on Standardized Procedures startson page 10. As noted in the COST benchmarking surveydiscussed above, multijurisdictional companies are oten re-quired to process thousands o property tax bills. It is criti-cal or states to implement standardized procedures to allowthese businesses to more ully and airly comply with stateand local property tax laws. Standardization osters an openand transparent process that also helps reduce the negativeperception, whether real or perceived, that a taxpayer musthave an inside connection to receive air treatment in a taxassessors jurisdiction.

1) Stadardzed e ates: Due dates or property taxreturns/reports must be consistent across the state. In-consistent due dates that vary by local jurisdiction and/or vary rom year to year create an undue complianceburden on business taxpayers. Fortunately, 23 states

scored an A or implementing standardized due datesor lings and payments. e property tax statutes oeach state should clearly provide uniorm dates identi-ying when all lings and payments are due. Due datesshould not be let open to the discretion o local asses-sors. We realize, however, that state or local assessorsshould have the exibility to extend due dates to deal

with unoreseen circumstances (e.g., massive oodingin the community, unexpected changes in property tax

valuation, etc.).

2) Stadardzed Frms & oersght: Because manystates have hundreds o property tax jurisdictions, it is

unconscionable to allow each taxing jurisdiction to re-quire separate and distinct orms or reporting propertytaxes, and to initiate an appeal o a property valuation.For eciency purposes, many business property taxpay-ers manage their property tax operations at a central lo-cation. It creates a tremendous and unnecessary burdenon a business taxpayer to le uniquely diferent orms inevery property tax jurisdiction where the taxpayer hasproperty. It can also lead to grossly unair penalties orailure to le the correct orm or ailing to properly re-mit payment by a non-standard due date. Worse, it canlead to dismissal o a property tax appeal simply becausea specialized orm required to initiate an appeal was not

completed.To avoid such burdens, a central state agency, typicallythe state revenue department, should prescribe all ormsand should require those orms to be uniormly acceptedby the states local assessors. Such an agency should alsomaintain strong oversight o valuation practices used bylocal assessors. For example, i obsolescence/deprecia-tion tables are used to value personal property, all as-sessors in the state should be required to uniormly usethe same tablesincluding uniorm exceptions to theuse o such tables. In addition, where applicable, salesratio studies should be used by the central state agency

to conrm that assessors are assessing, within an accept-able margin o error, the market value o the property(i.e., the price paid or the property by a willing buyerand seller with neither under a compulsion to buy orsell). It is important or the central state agency to ocuson the goal o assessing the property at market value; itshould not have to continuously equalize property val-ues or tax rates to deal with assessors in taxing jurisdic-

tions that inequitably assess property at a value greateror lower than market value.

3) eal Prpert valat cle Eer 2 t 3 years: eideal real property tax valuation cycle is not annual, butevery two to three years. is is because some propertiesrequire extensive appraisal techniques, making it ine-cient and impractical to value all properties in an asses-sors jurisdiction on an annual basis. Market values canquickly change, however, so a valuation (i.e., appraisalbased on actual visual inspection o the property) thatoccurs more than every three years is inappropriate andcan lead to vastly diferent values on similar properties,

depending on when the property was last appraised.Comprehensive valuations are also preerred over pe-riodic mid-cycle valuations. Mid-cycle valuations typi-cally use only limited statistical data to modiy the valueo properties in a given taxing jurisdiction.

It is also important or the valuation cycle to be xedat a set period o time in the law. e timing o prop-erty valuation should not be at the option o the asses-sor, regardless o whether the determination is based onsome orm o statistical analysis. It is troubling that inConnecticut, Delaware and New York, assessors havenot conducted a comprehensive valuation o propertiesin certain taxing jurisdictions or more than ten years.

Deviations rom the xed valuation cycle are appropri-ate only when necessary to reect the actual value othe property resulting rom a recent sale, assuming theproperty was sold in an arms-length transaction.

4) Els fr De Minimis vales: It is a waste oresources to require taxpayers to le reports on prop-erty with insignicant values. In many such cases, thecost to report and administer the tax on the propertyis greater than the property tax collected. Some stateshave addressed this issue. In Florida a personal prop-erty tax return is not due to a county i the total valueo the property is less than $25,000. Regrettably, the

Scorecard indicates that most states do not have statu-tory provisions that provide or non-reporting o deminimis values. COST strongly encourages states toenact de minimis provisions to assist both taxpayers andtax assessors.

is de minimis exclusion should also apply to the pay-ment o taxes. I a parcel has a tax bill o less than aset amount, a bill should not be issued. Certain COSTmembers indicated they have received property tax billsor less than a dollar. Kudos to Florida, which grantscounty commissioners the discretion to eliminate prop-erty tax bills under $30.


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States should also allow bills issued by state and/or lo-cal assessors to be consolidated or payment by the tax-payer. I the consolidated bill or all property owned bya taxpayer in the taxing jurisdiction is under a certainamount, e.g., $30, no tax bill should be sent.

5) Eqal iterest ates: Interest rates should airly reectthe time value o money. Accordingly, the imposition o

interest on a delinquent payment o tax should be thesame and no greater than the interest paid by a state orlocal government or the overpayment o a property tax.Only 11 states were ound to impose the same interestrate on property tax deciencies as they do reunds. edate interest begins to accrue is also important. Somestate and local governments will impose interest basedon the rst date a payment is late, but the reund ointerest may be based on a date subsequent to the actualpayment o the tax. Absent a reasonable amount o timeor assessors to correct billing and assessment errors, e.g.,changes made within 60 days o the property tax billing,reunds should be entitled to the same rate o interest

based on the same measurement period.

Fair Property Tax Appeal Procedures

e state-by-state detail on air property tax appeal proce-dures starts on page 22. Particularly with respect to personalproperty, our property tax system relies on the voluntary sub-mission by property owners o inormation to assist assessorsin valuing the taxable property in a taxing jurisdiction. Asystem perceived as unair and/or biased does not encourageproperty taxpayers to be open and willing to share inorma-tion with assessors about conditions impacting the value otaxable property. For ull cooperation, taxpayers need a real-istic amount o time to le an appeal, a reasonable burdeno proo, de novo review o an assessors or a property taxboards ndings, and the ability to partially pay or escrowany disputed tax.

1) ital ppeal eadle: Taxpayers seeking to le aproperty tax appeal to a local assessor, local property taxboard, or, i applicable, to a state tax agency, should haveat least 60 days rom the ormal written notice o theassessed value o the disputed property. e ideal timeperiod is 90 days, which is the period o time to appealspecied in the Model State Administrative Tax CourtAct o the American Bar Association.xiv Unortunately,23 states impose an initial property tax appeal process

that afords a taxpayer with less than 30 days notice toappeal. For example, Kentucky does not provide an ad-equate time period to appeal an inaccurate assessment.In Cromwell Louisville Associates v. Commonwealth of Kentucky,xv a taxpayer that ailed to appeal the assessors

valuation within 13 days rom the inspection period wasnot allowed to subsequently challenge the property valu-ation, even though a stipulated valuation error resulted ina property tax overpayment o $67,327. Most troubling isthat some assessors, when changing a propertys value, arenot required by statute to send a valuation notice directlyto the taxpayer. Minimum due process requires air no-

tice; merely publishing a notice in the local newspaper oron the assessors bulletin board is not sucient.

2) Brde f Prf: It is customary with most tax appealsor the burden o proo to rest with the taxpayer. How-ever, property tax is unique in that the taxpayer otenhas no direct contact with the assessor when the initialdetermination is made or the market value o the prop-

erty. Reecting that reality, some jurisdictions imposethe initial burden on the assessor to present evidence toshow the basis or the valuation o the property. is isthe preerred burden. Another acceptable method is toplace the burden on a taxpayer to prove the taxpayersasserted valuation o the property by a preponderanceo the evidence (the burden normally imposed in otherstate tax disputes). Any additional burden, such as aclear and convincing standard, is grossly unair. ereis no justication or imposing a burden o proo stan-dard similar to the standard used by some jurisdictionsto prove raud. COST is pleased to report that Floridaand West Virginia have recently changed their laws to

replace an unair burden o proo requirement with amore reasonable preponderance o evidence standard.

3) De Novo ppeal: In general, the preerred tax appealprocedure is to grant taxpayers an initial administra-tive review beore a tax assessor or a board dedicated tohandling property tax appeals. Such an appeal providestaxpayers and assessors with an opportunity to quicklyresolve disputes based on errors or other actual discrep-ancies. However, subsequent appeals should be to anindependent tax tribunal; and such review should be denovo;i.e., the record or appeal should not be set at theinitial administrative (non-independent) hearing level.Further, the property owner should be able to raise newissues and evidence beore the independent tax tribunal,such as an appraisal and/or testimony rom experts thatmay not have been available (or provided) at the initialhearing with the tax assessor or the property tax board.

4) Esrw r Partall Pa spted a: Large prop-erty taxpayers are oten erroneously blamed or caus-ing nancial harm to a community by appealing anassessors valuation or requesting a reund on propertysubsequently ound to be overvalued. Businesses under-stand that property tax revenues are critical or undingmany important government unctions, particularly orprimary and secondary public school education. How-

ever, it is unair to criticize property taxpayers or seek-ing appeals or reunds when they are initially orced topay the ull amount o disputed tax (i.e., a pay-to-playtax system) when the ault rests with the assessor whoimproperly valued the property. A property tax systemthat requires disputed property taxes to be paid in ullin order to appeal (and thus avoid late payment penal-ties), creates an incentive or valuation ocials to avoidappropriate adjustments to a propertys valuation whenit is above the propertys air market value. e practiceby certain states o requiring ull payment o disputedproperty taxes must end.


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One simple (and preerred) solution is to allow tax-payers to pay the property tax on only the undisputed

value o the property. I a propertys value is ound tobe greater than the undisputed amount ater all appealsare exhausted, any additional tax owed should be paidby the property taxpayer, with interest. As a second bestalternative, the disputed tax should be placed and heldin an interest-bearing escrow account until the dispute

is resolved. Either approach mitigates political pressureon both tax ocials and the taxpayer to reduce the prop-erty tax recipients exposure to reunds resulting rompayment o the disputed portion o the property tax.

Residential Property Tax Burden v. Business Property Tax Burden

To ensure neutrality, the property tax burden must be sharedequally between business property and residential property.A state that imposes a lower assessment rate and/or a lowerannual cap on property growth or residential property, ascompared to business property, is unairly shiting the bur-den o the property tax to the business sector. Starting on

page 32, this Scorecard identies property tax systems thatplace a higher property tax burden on business property.(Targeted exemptions provided to certain owners o businessand/or residential property are not covered in this analysis.)

1) ssessmet ats: Ideally, the assessment ratio orproperty valuations in a state should be 100% o theair market value o all taxable property in the state. For

various reasons, some states assess all property at lessthan air market value, but the same percentage o airmarket value should apply to all taxable properties. In-equities arise when certain properties (e.g., public utilityproperties and some other centrally assessed properties)are assessed at a higher rate than other properties in the

state or valued diferently (e.g., unit valuation) to imposea greater tax burden on that property.xvi Indeed, somestates impose multiple classications o property, each

with diferent assessment rates. Some states also allowassessment ratios to vary rom locality to locality, urthercomplicating compliance and administration. When alltaxable property is valued at 100% o air market value,the tax becomes more transparent. It is easier or own-ers o property in the state to understand their propertytax bills and to compare tax rates imposed on propertythroughout the state.

2) a ssessmet caps: Another mechanism used by

some states to shit the burden o the property tax tobusiness is the imposition o caps on the growth oproperty that only applies, or more avorably applies, toresidential properties. For example, Florida and Indianaboth provide caps on residential and business property;however, the caps avor residential property. Floridacaps residential property at the higher o 3% or ination

while business property is capped at 10% (excludingnew construction). Indianas cap structure ranges rom3% or some business property to 1% or owner-occu-pied homes. e preerred tax structure imposes no caps,and tax rates would adjust according to the overall valu-

ation base in a taxing district. A recent study evaluatingproperty caps by the Lincoln Institute or Land Policyrecommended their elimination (along with homesteadexemptions) as a way to make the property tax systemmore equitable.xvii I caps are imposed, they should applyequally to business and residential property; e.g., Cali-ornias annual growth cap is 2% or ination, whicheveris less.xviii

3) Eqal Prpert a Brde: I the cumulative efecto exemptions aforded to residential property ownersunairly shits the burden o the tax to the businesssector, an imbalanced property tax structure that doesnot adequately distribute the property tax burden to allproperty owners in a state is created. While the varioushomestead exemptions a state ofers are provided in thetable, the scoring or this category was primarily basedon the Minnesota Taxpayers Associations 50-StateProperty Tax Comparison Study or taxes payable in2009.xix Table 19 in that study compares the efectivetax rate on a $1 million commercial property to that o

a median-value home in select metropolitan areas oeach state. e higher the ratio, the more commercialproperties are subsidizing the property taxes paid byhomeowners. Fortunately, 15 states have efective taxrates that indicate both types o properties are treatedequallya ratio at or close to 1. On the other end, sixstates, including New York (with New York City), im-pose efective tax rates on commercial properties thatare three to six times greater than those imposed onresidential property. An Idaho case, Simmons v. StateTax Commission, 723 P.2d 887 (1986), describes theimpact o a 50% (up to $50,000) homestead exemp-tion over time. Tax rates signicantly increased in or-

der to pay or the homestead exemption, which in turnincreased the tax burden imposed on the non-exemptproperty owners.xx

GEnE inFoion

Except or the Other Issues column, the general inorma-tion section starting on page 39 was not graded. is sectiono the Scorecard includes the types o property taxpayers ina state, the taxable property in the state (e.g., some statesdo not assess personal property), the general valuation dateor the property in a state, and the initial jurisdiction thathandles a property tax appeal.

SPEciFic SuvEy QuESionS

e ollowing are the specic survey questions sent to prop-erty tax administrators o each state, to COST members, andto property tax practitioners.

General Information

1) What categories o business taxpayers are taxed in thestate (general business, utilities, telecommunications,railroad, oil and gas, etc.)? Which o these categorieso taxpayers are locally assessed and which are centrallyassessed?


9/48

2) What type o property is taxable in the state (real prop-erty, personal property, or both)?

3) What are the property valuation dates and assessmentdates or properties in the state?

4) What jurisdiction(s) handles the initial appeal o aproperty tax assessment?

Standard Procedures

1) Are there statewide standardized due dates or lingsand payments?

2) Are there statewide standardized orms used or lings(returns/reports, assessments, appeals, etc.)?

3) How oten is real property in the state revalued?

4) Is there an exclusion allowed or property that is o a deminimis value or would create a de minimis tax bill (e.g.,no bills issued or under $10)?

5) Are equal interest rates used by the taxing authoritiesor both interest on underpayment o taxes and reundinterest on overpayment o taxes?

Fair Tax Appeal Procedures

1) What is the deadline or taxpayers to initially appeal aproperty assessment in the state? How many days doesthe taxpayer have rom the notice o assessment to thedeadline to appeal?

2) Who has the burden o proo at the initial appeal? Whatlevel o proo must be provided in the initial appeal?

3) Is a de novo standard o review used at the subsequentlevel o appeal?

4) I the taxpayer chooses to challenge the assessment, canthe tax be escrowed? Or can the taxpayer make a partialpayment o the undisputed tax until the valuation dis-pute is concluded?

Residential v. Business Property

1) What are the diferent assessment ratios used to valuethe diferent types o property and/or diferent types obusinesses in the state?

2) Does the state have caps? I so, how do they apply tobusiness property compared to residential property?

3) Does the state have homestead exemptions, and are theexemptions narrow (e.g., targeted towards special groupso taxpayers such as seniors and disabled) or broad (e.g.,apply to almost all residences)?

cnoEGEEn oFPPEciion

Although the number o respondents is too numerous to list,COST would like to acknowledge and thank those who par-ticipated in the benchmarking survey and the production othis Scorecard, including COST member companies, prop-erty tax practitioners and state property tax representatives.

eir participation is deeply appreciated.


10/4810

State

StandardizedDueDatesfor

Filings/Payments?

Gr ad e

StandardizedForms&

Oversight?

Gr ad e

RealPropertyValuation

CyclesEveryTwoto

reeYears?

Gr ad e

ExclusionforD

eMinimis

Values?

Gr ad e

EqualInterestRates?

Gr ad e

Total

Points

Total

Grade

AL

Yes.

Reports

due:realan

d

personalproperty

lingsare

due

b/t

10/1an

d12/31(Ala

.

Code.

40

-7-2

);ut

ility

lings

are

dueon

3/1(Ala

.Code

40

-21-3,

-17)

.Payments

due:real,p

ersona

l,an

dut

ility

property:fol

low

ing

10/1(Ala

.

Code

40

-11-4)

.Fre

ightline

andequipmentcompanies

payment

dueupon

30days

from

dateoftheprel

iminary

assessment

(Ala

.Code

40

-

21-5

2).

A

Yes,canusestateorcounty

forms.

A

At

least

onceeverythreeyears.

A

No.

F

No.

Interest

isnotpa

idon

theoverpaymentoftaxes(A

la.

Code

40

-1-4

4).

F

8

B

AK

No.

Var

ies

loca

lly.B

utoi

land

gasreturnsmay

berequ

ired

by

thestate

(AS43

.56.070,AS

43

.56.110)

.

F

No.

F

Nospeci

cinterval

(shortest

practica

ltime)

(AS

29.4

5.1

50).Statean

d

mun

icipa

ltaxab

leproperty

isva

luedannual

ly(AS

29.4

5.1

60).

D

No.

F

Yes.

Annua

lrateof

8%for

stateoi

landgastax

(AS

43

.56.160)

.Intereston

delinquentmun

icipaltaxes

shal

lnotexceed

15%peryear

(AS29

.45.250)

.

A

15

C-

AZ

Yes.

Reports

due:

4/1(A

.R.S.

42-1

5053).Payments

due:

rst

halfby10/1an

dot

her

halfby

3/1;fortaxamountsun

der

$100

,theentireamount

isdue

10/1(A

.R.S.S

ec.4

2-18052)

.

A

Yes.

A

Annual

(A.R.S.

42-1

5101),

withcertainpropertyva

lued

thesam

eforuptothreeyears

(A.R.S.

Sec.

42-1

3052).

B

No.

F

No,annual

16%rate

for

underpayment

(A.R.S.

42-

18053)

.

F

9

B-

AR

Yes.

Reports

due:

5/31(ACA

26

-26-201)

.Payments

due:

1st bus

iness

day

inMarch

throug

h10/15;taxes

due

from

utilitiesan

dcarr

iersmust

be

paidininstal

lmentsaccord

ing

tosc

heduleprov

ided

bystatute

(ACA26

-35-501)

.

A

Yes.

(None

forappealsof

centra

llyassessedproperty.)

B

Rea

lproperty-

minimumof

every3

years

(ACA26

-26-

1902(a))

.Uti

lityan

dcarr

ier

property

isva

luedannual

ly.

C

No

F

Yes,

10%(ACA26

-36-201)

.

A

7

B

StandardzedPrcedures


11/48


12/48


13/48

State


Filings/Payments?

Gr ad e

StandardizedForms&

Oversight?

Gr ad e


CyclesEveryTwoto

reeYears?

Gr ad e

ExclusionforD

eMinimis

Values?

Gr ad e

EqualInterestRates?

Gr ad e

Total

Points

Total

Grade

ID

Yes.

Reports

due:personal

property

ling

for

loca

lly

assessedproperty-

3/15

(IC63

-302),11/1for

transientpersonalproperty

(IC63

-313),1st

Mon

day

inNovem

ber

forproperty

brought

infromouts

idethe

state

(IC63

-602Y),4/30

foroperator

sstatement

for

centra

llyassessedproperty

(IDAPA35

.01.03

.404).

Payments

due:

1st

half12/10,

2ndhalf6/20(IC63

-903).

B

No;thestateprepares

certain

forms

butuse

isnot

man

datory.

C

Annual

ly,s

upplemente

dby

reappra

isal

includ

ingphys

ical

inspect

ionat

leastevery

5years

(IC63-314)

.

B

No.

F

Underpayment-

1%/month

(IC63

-1101);overpayment

refundsareperm

issiveonthe

partofcountycomm

issioners

(IC63

-1302)

.

F

12

C

IL

No,

lingan

dpayment

dates

vary

bycounty.

ereare

statew

ideru

lesappl

icab

le

when

lingappealsw

iththe

Illinois

Property

Tax

Appea

l

Board

(See

86ILCS1910)

.

Forthemostpart,p

ayments

arepaya

ble

intwo

instal

lments

-6/1an

d9/1(35ILCS

200/21

-5);butcan

bealtere

d

byloca

lord

inance.

F

No.

erearestatew

ide

forms

appl

icab

lew

hen

lingappeals

w/the

Illinois

Property

Tax

Appea

lBoard.

D

Everyfouryears

(35ILCS

200/9-2

15),excepteverythree

yearsin

Coo

kCounty.

C

No.

F

No.

F

17

D

IN

Yes.

Reports

due

datesare

stan

dard

ized:persona

l

property

lings

due

5/15(Ind.

Code

6-1.1-1-7,6-1.1-3-

7).P

ayments

due:

5/10an

d

11/10(Ind.C

ode.

6-1.1-7-

7,6-1.1-22

-9).

A

Yes.

Personalpropertyreturns

are

ledonstateprescr

ibed

forms-

www.in.g

ov/dlgf/4971

.

htm

A

Statutori

lyevery

5years

(Ind.

Code

6-1.1-4-4);however,

thestate

implemente

dthe

annualad

justment

(trend

ing)

process

in2006(thelast

reassessmentwas

2002).ere

islegislat

ionpend

ingthat

wou

ldimplement

cyc

lical

reassessments,

where

by20%

ofthep

arce

lsarereassessed

ina

5yearp

eriod.

F

No.

F

No,un

derpayment-

10%;

overpayment-

4%(Ind.Co

de

6-1.1-37

-10,6-1.1-37

-11)

.

F

12

C

Continues

StandardzedPrcedures(Continued)


14/4814

State


Filings/Payments?

Gr ad e

StandardizedForms&

Oversight?

Gr ad e


CyclesEveryTwoto

reeYears?

Gr ad e

ExclusionforD

eMinimis

Values?

Gr ad e

EqualInterestRates?

Gr ad e

Total

Points

Total

Grade

IA

Reports

dueto

loca

lassessorsare

notstandar

dize

d,ot

herreports

andpaymentsarestan

dard

ized.

Payments

due:

9/30(rsthal

f)

&3/31(secon

dhalf)(Iowa

Code

445/36A).

C

Reports

duetothe

loca

l

assessorsarenotstan

dard

ized.

C

Locally

assessedrealproperty

isva

luedeverytwoyears

(Iowa

Code

428.4);central

ly

assessed

property

isva

lued

annually.

A

Minimum

Billof

$2.

C

No

interestonoverpayment

andun

derpayment

draws

1.5%interestpermonth

(Iowa

Code

445.39).

F

10

B-

KS

Yes.

Reports

due:

Personal

property-

between

1/1an

d

3/15(K

.S.A.

79-3

08);motor

carr

iersan

dut

ilities

(inc

ludes

railroa

ds)

-3/20(K

.S.A.

79-

5a02);oi

landgas

lease-

4/1

(K.S.A.

79-3

32a).P

ayments

due:realan

dpersonalproperty

-12/20(K

.S.A.

79

-2004,

79-2

004a).

A

Yes.

A

Annual

ly(K

.S.A.

79

-1476,

79-1

478)

.

B

Yes,w

henpersona

lproperty

tax

islessthan

$5

(K.S.A.

79-3

225)

.

C

No.

Interestrate

is2%less

IRSshort-term

interestrate

forre

fundsan

d2%morefor

underpayments

(K.S.A.

79-2

968)

.

F

7

B

KY

Yes.

Listingperiod

forreal

property:1

/1-

3/1.Due

date,p

ersona

lproperty:

5/15

(KRS132.220)

.Col

lect

ions

begin

10/1or

11/1(KRS

134.020(1)).

A

Yes.

A

No

less

thanevery

4years

(KRS

132.690)

.

B

Noun

iformexclusion;

decision

bylocalo

cials

w/$10max

imum.

C

No,

base

donpr

imerate

charge

dbyKentucky

banks

(KRS131.183)

.

F

7

B

LA

No,manyexcept

ions.

Returns

due:

2/15for

nancial

inst

itut

ions

(La.

R.S.

47:1

970);3

/1for

insurancecompanies

(La.

R.S.

47:1

954);4

/1forpu

blic

serv

icecompaniesan

dreal

&

personalproperty

(La.

R.S.

47:2

324)

,exceptpersona

l&

realpropertyreturns

due

45

daysafterrece

iptof

forms

in

Jeerson

Parish.D

eterm

inat

ion

ofexempt

ionon

1/1ofeach

taxyear

(La.

R.S.

47:1

952)

,

except

Orleans

Parish,

determ

inat

ionmadeasof

8/1

inpreced

inngyear

(La.

R.S.

47:1

703(B))

.Payments

due:

12/31(La.

R.S.

47:2

101(A),

47:2

171)except

2/1inOrleans

Parish

(La.

R.S.

47:1

997(B))

.D

Yes.

A

Rea

lproperty-

every

4years;

persona

lproperty-

annual

ly

(La.

R.S.47:2

331)

.ese

prov

isio

nsalsoapplytopu

blic

serv

iceproperty

(La.

R.S.

47:1

978.1(A)(1)).

C

No

F

No,

1.25%permonthon

underpayment

(La.

R.S.

47:2101).

F

13

C



15/48


16/48


17/48


18/48


19/48

State


Filings/Payments?

Gr ad e

StandardizedForms&

Oversight?

Gr ad e


CyclesEveryTwoto

reeYears?

Gr ad e

ExclusionforD

eMinimis

Values?

Gr ad e

EqualInterestRates?

Gr ad e

Total

Points

Total

Grade

RI

No,

due

datevaries

by

mun

icipal

ity

(R.I.G

en.L

aws

$44

-5-5,-

15).

D

Yes

(see

R.I.G

en.L

aws

44

-

5-26).

A

Townandcitiesmustreva

lue

realpro

pertyeach

10thyear

afteris

rstreva

luat

ion

(R.I.

Gen.L

aws

44

-5-1

1);some

designate

dloca

litiesmust

reva

lue

every

3years

(R.I.G

en.

Laws

44-5-1

1.6)

.

F

No.

F

No,un

derpayments

-18%;overpayments-

7.75%(see

http:/

/www.

tax.state.ri.u

s/m

isc/

Interest

RateC

hange1

0302008

.

php).

F

15

C-

SC

No.

Reports

due:

4/30(SC

Code

12

-37-905)

.Payments

vary

bycity

(SCCode

12

-

45-7

0).

C

Yes

(see

http:/

/www.s

ctax.o

rg).

A

Rea

lpropertyreva

luedevery

5

years(S

CCode

12

-43-217)

.

D

No.

F

No,w

hileinterestrate

onun

derpaymentsan

d

overpayments

is5%

,from

July1,2008throug

hJune3

0,

2009theoverpaymentrate

wasre

duce

dby2%

.

D

12

C

SD

Yes.

Reports

due:

Telep

hone,

publicserv

icean

dpipe

line

-4/15(SDCL10

-33-4);

railroa

d-

5/1(SDCL10

-33-

4)an

dairl

innes-

6/1(SDCL

10

-29-3)

.Allpersonal

property

isexempt.P

ayments

due:

4/30an

d10/31(SDCL

10-2

1-23).

A

Yes.

A

Annual

ly.

B

No.

F

No.

Interestonoverpayments

is4%(SDCL10

-18-17);

interestonun

derpaymentsis

10%(SDCL10

-21-23).

F

9

B-

TN

No.

Ingenera

l,reports

due:

3/1.Payments

due:

2/28

(however,p

ayments

for

Memph

isare

due:

8/31an

d

2/28).

F

Yes,canusestate

forms.

A

Countiesareoneithera

4,5or

6yearreappra

isalcycle

(T.C.A.

67

-5-1601).

D

No.

F

Yes-

1%permonth

(T.C.A.

67-5-2

010)

.

A

11

C+

TX

Yes.

Reports

due:

4/15(TEX

.

TAXCODE22

.23)

.

Payments

due:

2/1ofthe

follow

ingyear

(TEX

.TAX

CODE31

.02)

.

A

Yes,canusestate

form;

however,s

omeappraisa

l

districts

havevery

biased

preference

for

loca

lforms.

B

At

least

every

3years

(TEX

.

TAXCODE25

.18)

.

B

Yes,

dem

inimisapp

liedto

tax

bills

.

B

While1%permonth

for

both

(TEX

.TAXCODE

33.0

1),s

tategets

60daysto

payan

dw

ithun

derpayment

anad

ditionalpena

ltyof

12%

forthe

rstmonthan

d1%

permonththerea

fterapplies

.

Interestaccruesontheamou

nt

refundedatannnua

lrateof

12%(TEX

.TAXCODE

31.1

2).

F

7

B

Continues



20/48


21/48

State


Filings/Payments?

Gr ad e

StandardizedForms&

Oversight?

Gr ad e


CyclesEveryTwoto

reeYears?

Gr ad e

ExclusionforD

eMinimis

Values?

Gr ad e

EqualInterestRates?

Gr ad e

Total

Points

Total

Grade

WI

Yes.

Reports

due:

3/1(Wis

.

Stat.

70.3

5(3)).Payments

due:

1/31(inpartor

full)an

d

second

instal

lment

due

7/31

(Wis

.Stat.

74

.11)

.Persona

l

propertytaxpayments

due:

1/31(Wis

.Stat.

70

.35(3)).

A

Yes.

A

Locally

assessedproperty

variesw

idely.

Annua

lfor

manufactur

ingproperty;

statemustcompletea

eld

investig

ationoron-s

ite

appraisalevery

5years

(Wis

.

Stat.

70.0

5(5)(b))

.

D

No.

F

No,

12%for

delinquent

payments;manufacturing

propertyorexcess

ive

assessmentof

loca

llytaxe

d

propertyattheaverageannu

al

discount

interestrate.

F

11

C+

WY

Yes.

Reports

due:

3/1(W

.S.

39-1

3-103(b)(v))

.Payments

due:

11/10an

d5/10(W

.S.

39-1

3-107)

.

A

Yes.

A

4yearv

aluationcycles

(DOR

RuleC

h.9,3)(newru

les

prov

ide

fora

6yearcycle).

Propertyva

luesmust

be

updated

annual

ly.

D

No.

F

No.

Underpayment

is18%per

annum

(W.S.

39-1

3-108).

F

11

C+



22/48


23/48


24/48


25/48


26/48


27/48


28/48


29/48


30/48


31/48

State

InitialAppealDeadline(s)

Gr a d e

BurdenofProof

Gr a d e

DeNovoReviewonSubsequent

Appeal?

Gr a d e

AbilityToEscrowOrPartialPay

DisputedTax

Gr a d e

Total

Points

Total

Grade

WI

60days

formanufacturingproperty.

Local

lyassessedpropertyrequ

iresintent

toob

ject

15days

fromnotice

(rst

classcitieson

ly,a

ndafternoticeof

determ

inat

ionof

Boardof

Assessors

).All

othersmustgivewrittenororalnoticeat

least

48hourspr

iorto

Boardof

Review

s

rstmeeting,a

ndlenoticeofobject

ion

beforeorw

ithinthe

rsttwo

hours

of

the

boar

ds

rstsc

heduledmeeting.

F

Ontaxpayerto

illustratethatassessor

s

valuat

ion

iserroneous.

Wis

.Stat.

Sec.

70.4

7(8)(i).

B

Depen

ds,t

ypical

lycases

hear

dbythe

Boardof

Rev

ieworthe

Wiscons

inTax

Appea

lsComm

issionareappealed

base

d

ontherecordcreate

d;un

derspec

ic

appealprocedurestothemun

icipal

govern

ing

body

,thecasecan

beheard

denovoatthesu

bsequentappealto

circuitcourt.

Cityof

Milwau

keesabi

lity

tooptoutof

denovoreviewru

led

unconstitutional.

D

No,taxmust

bepa

id.S

eegenera

llyWis

.

Stat.

74.3

5.

F

12

D

WY

Local

lyAssesse

d:Assessorsocew/

30

daysofthenoticemai

ling.

W.S.

39-1

3-109(b)

.State-a

ssesse

dproperty,

must

leprotestw

ithDepartmento

f

Revenue

/State

Boardof

Equal

ization

within

30daysofnoticemai

ling.

C

Ontaxpayer

(preponderanceof

evidence

).

B

Yes-

loca

ldec

isionappealedtotheState

Board

isdenovo.S

ubsequentappealis

ontherecordonthe

ndingsof

fact

fromthe

lowercourtor

hear

ing

body

.

A

Yes,proteste

dtax

isplaced

ininterest

bear

ingescrowaccount.

W.S.3

9-13

-

109(f)

.

B

4

B

Continues

FaraxppealPrcedures(Continued)


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38/4838

State

AssessmentRatio

s

Gr a d e

TaxAssessmentCaps(peryear)

Gr a d e

EqualPropertyTaxBurden

Gr a d e

Total

Points

Total

Grade

WA

100%of

fairmar

ketva

lue;

however

statutesprov

ide

thatcentra

llyassessedva

luesareequal

izedtothegenera

l

leve

lsofassessment

(usual

lylessthan

100%)inthe

countiesw

heretheyaretaxe

d.RCW

84.4

0.030.

B

No.

A

Taxreduct

ion

forseniors,

disa

bledcitizensan

dlow-

incometaxpayers.M

TARat

io=

1.00(41)

.

A

1

A

WV

Mostpropertyassessedat

60%ofcu

rrent

fairmar

ket

value.

W.V

a.Code

11

-1C

-1(d).H

ighertaxrate

impose

doncommercialan

dindustr

ialproperty.

D

No.

A

Exemptions

for

low-i

ncomeseniorsan

ddisa

bled.

Addition

alexempt

ion

base

don

income

isre

funded

by

the

State.M

TARat

io=

2.18(12)

.

D

6

C-

WI

Var

ies

bymun

icipal

ity-

sameratiosused

for

bothreal

andpersonalproperty.H

owever,dep

endingontime

period

between

lastreva

luat

ion,

dierentclassescan

have

dierentratios.T

woclasses,un

deve

lope

dclassan

d

agricu

ltural

forest,a

reva

luedat

50%

oftheirmar

ket

value.

Wis

.Stat.

70

.05(5)(a)&7

0.32(4).

D

No.

ereare

limitsontax

leviesthatapplyacross

propertyclasses.

A

ereisa

homesteadcred

itagainst

incometaxes

for

property

taxesonapr

imaryresi

dencew

/income

belowa

certainle

vel.MTARat

io=

1.03(39)

.

A

3

B

WY

General

ly9.5%of

FairMar

ket

Value;

industrial

propertyat

11.5

%of

FMV;andminera

lsan

dm

inesat

100%of

FMV

.W.S.

39-1

1-101(a).

D

No.

A

erearepropertytaxexempt

ions

forveteransan

d,

whenfunded

bythe

legislature,there

isa

homeowners

taxcredit

for

homesva

lued

belowa

fullva

lueof

$61,580

.MTARat

io=

1.00(41)

.

A

3

B

esdentalv.BusnessPrperty(Continued)


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45/48

State

TypeofTaxpayers

TaxableProperty

ValuationDate

InitialAppealJurisdiction

OtherIssues

Points

VA

Local

lyassessed:General

business;

Central

lyassessed:Pub

licserv

ice

corporat

ions.

Rea

landpersonalproperty.

1/1or

7/1.(58

.1-3

011)

Local

lyassessed:Loca

lassessoran

d

thentocountyorc

ity

boar

dof

equa

lizat

ion

(rea

lproperty)or

Tax

Comm

issioner

(businesspersonal

property

).Centrally

assessed:

State

CorporationC

omm

issionor

Tax

Comm

issioner

(pipel

inean

d

operat

ingra

ilroa

dp

roperty).(

See

58.1-2

600)

0

WA

Local

lyassessed:General

business;

Central

lyassessed:Mostut

ilitiesand

railroa

ds.(

Statealsoprov

ides

advisory

valuat

ions

attherequestof

loca

lassessors

for

industrialtaxpayers.

)

Rea


1/1(7/31fornew

cons

truction

).RCW36

.21.080.

Local

lyassessed:Co

unty

Boardof

Equal

izat

ion.

Central

lyassessed:

WADepartmentof

Revenue.

Unitva

luat

ion

failstoexcludevalueof

intang

ible

property

forcentra

llyassessedproperty.

1

WV

Local

lyassessed:General

business;

Central

lyassessed:Pub

licut

ilitiesan

d

railroa

ds(manufacturingan

dindustr

ial

property,n

aturalresourcepropertyis

centra

llyappraise

d).

Rea


7/1(12/31forpu

blicut

ilities

andra

ilroa

ds).

Local

lyassessed:Loca

lassessor

and/orcountycomm

ission.

Central

lyassessed:B

oardof

PublicWor

ks(publ

icut

ilitiesan

d

railroa

ds)or

Tax

Co

mm

issioner

(central

lyappraised

property

).

Unitva

luat

ion


intang

ible

property

forcentra


1

WI

Local

lyassessed:General

business;

Central

lyassessed:Manufacturing

propertyan

dut

ilities

(powercompan

ies

areassessed

byDORongrossreceipts

in

lieuofpropertytax).

Rea


1/1.

Local

lyassessed:Boar

dofassessors

thento

loca

lboardofreview

(rstclasscitiesonly;ot

herw

ise

Boardof

Rev

iew

).C

entral

ly

assessed:State

Boar

dof

Assessors

andthen

Wisconsin

Tax

Appea

ls

Comm

ission.

0

WY

Local

lyassessed:General

business;

Central

lyassessed:m

ining,ut

ilities,

railroa

dsan

dagricu

lture

land.

Rea


1/1.

Local

lyassessed:Assessor

soce

andCounty

Boardof

Equal

izat

ion.

Central

lyassessed:W

YDORan

d

State

Boardof

Equa

lizat

ion.

Unitva

luat

ion


intang

ible

property

forcentra


1

Generalinfrm

atnandotherissues(Continued)


46/4846

EnnoESiComment rom Gerald Prante, economist at the Washington, D.C. based Tax Foundation. Located on MSN Money, http://articles.moneycentral.msn.com/Taxes/Advice/AmericasMostHatedTax.aspx.iiResearch Committee o IAAO,Assessed Value Cap Overview, published in the Journal o Property Tax Assessment & Admin-istration (2010), Volume 7, Issue 1, p. 17.iiiFrom US Census Bureau, State Government Tax Collections in 2009 report released in March, 2010 and revised May, 2010.

While property tax revenue was, as a whole up or the states, collectively, state tax collections in scal year 2009 were down 8.5%rom scal year 2008 collections.ivRichard Almy, Alan Dornest & Daphne Kenyon, Fundamentals of Tax Policy, published in 2008 by the IAAO. Seepage 12.vHolley Hewett Ulbrich,A Property Tax for the 21th Century, published in 1998, indicates issues o airness are probably thebiggest cause o taxpayer discontent. e report can be ound at: http://www.strom.clemson.edu/opinion/ulbrich/proptax.html.viSee Total State and Local Business Taxes report or scal year 2009 prepared by Ernst and Young in conjunction with COSTissued March, 2010. e report can be ound at: http://cost.org/StateTaxLibrary.aspx?id=17768.viiId.viiiProperty Tax Revenue Increased As Property Values Fell, report by the Tax Foundation issued August 31, 2010, No. 243.ixe Property Tax Task Force was renamed the Property Tax Committee in 2010.xIAAO Code o Ethics and Standards o Proessional Conduct, see http://www.iaao.org/sitePages.cm?Page=70.xiRichard Almy, Alan Dornest & Daphne Kenyon, supra note iii, at 28.xiiMark Haveman & Terri A. Sexton, Property Tax Assessment Limits, published June, 2008 by the Lincoln Institute o LandPolicy. Quote is rom the Executive Summary on p. 2. Seehttp://www.lincolninst.edu/pubs/1412_Property-Tax-Assessment-Limits.xiiiCOST would like to specically acknowledge the work conducted by students that were recipients o the Georgetown Uni-versity Law Center Fellowship program at COST. e ollowing ellows assisted COST in conducting research to gather dataor this Scorecard: Sunday Vanderver (2008), Melissa Smith (2009), and Guinevere Seaward (2010).xiv e Model State Administrative Tax Court Act was adopted by the American Bar Association in August, 2006. eModel Act can be ound at: http://www.abanet.org/tax/groups/salt/ABA1_OFFICIAL_MODEL_ACT_REPORT_AS_ADOPTED_8-7-06.pd.xvSee Case No. 2008-SC-000644-DG rom the Supreme Court o Kentucky rendered September 23, 2010.xviSome states, such as Maryland, inappropriately include the value o intangibles when using a unit valuation methodology.xviiJ. Wayne Moore, Property Tax Equity Implications of Assessment Capping and Homestead Exemptions for Owner-Occupied Single-Family Housing, published in the Journal o Property Tax Assessment & Administration, Volume 5, Issue 3, p. 63.xviiiO concern, some Caliornia legislators have proposed legislation to treat business property diferent rom residential.xixe report is available to the public at the Lincoln Institute. e website location is www.lincolninst.edu/subcenters/signi-

cant-eatures-property-tax/.xxSimmons v. Idaho Tax Commission, 723 P.2d 887, 889 (Idaho 1986). A chart in the case noted that tax liability on non-exemptproperty increased by 34% while the liability or exempt property dropped by 25%.xxiLegislation passed (HB2001) to reduce Class 1 property to 19.5% (2013), 19% (2014), 18.5% (2015) and 18% (2016 andthereater). Class 2 property is reduced to 15% (2016 and thereater).


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