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Senate Bill 157, Generally Revise Tax Reappraisal Laws


Establishes a Two-Year Reappraisal Cycle
Posted Date: 
May 1, 2016 (Updated June 3, 2015)

Senate Bill 157, Generally revise tax reappraisal laws, was signed into law on April 29, 2015.  The effective date of the bill was on passage and approval, however its applicability date was retroactive to January 1, 2015, which means its provisions will apply to the current 2015 tax year so will apply to Fiscal Year 2016 levies and tax determinations.

SB 157 establishes a two-year reappraisal cycle, rather than a six-year cycle which has been the past practice.  Future reappraisals will be more responsive to changing market conditions and will help smooth out the peaks and valleys of market cycles.

SB 157 made two significant changes to the calculations for mill levies after the assessed market value has been determined by the Department of Revenue. It repealed 15-6-222 which exempted a portion of the value of residential property from taxation.  It also reduced the tax rate that is applied to the assessed value from 2.47% to 1.35% so the net affect is minimal.

These changes greatly simplify the calculations for voted levies. In the past when the dollar impact on homes was calculated for a specific number of mills, you had to apply the exempt percentage to the assessed market value - then multiply that amount times the tax rate, both of which changed each year during a reappraisal cycle.  That is no longer necessary.  You now just multiply the assessed market value times 1.35% to arrive at the taxable value on residential properties having a value under $1.5 million.  For residential properties having a value over $1.5 million and commercial properties the tax rate is 1.35% times 1.4, or 2.75%.

The revised spreadsheet is on our "Resources" page and is to be used to determine the tax implications of voted levies.

I realize that some jurisdictions have already placed voted levies on the ballots for upcoming elections.  Since it is obviously too late to make any changes to those elections you should proceed.  If your jurisdiction is voting on a levy with a specific number of mills, the number of mills that are applied to a residential property will not change.  Only the estimated impact will change and that will be minimal.  If your ballot was for a specific dollar amount then the number of mills that would be levied is an estimate anyway and here again the actual change from your estimate to what it ends up being when levies are set in September will be minimal.

If you are planning a special levy election and the resolution adopted by the governing body to place a levy question on the ballot has not yet been done or there is still sufficient time to adopt a replacement resolution, you should use the new spreadsheet to make the calculations of the impact on homes having values of $100,000 and $200,000 as required by 15-10-425.

Harold Blattie | hblattie@mtcounties.org | (406) 449-4360