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Palo Alto County Receives Tax Equalization Order
by Dan Voigt
POSTED: September 9, 2009
After residential and agricultural land and property owners received new assessments earlier in the year, commercial property owners in Palo Alto County will also be receiving tidings in the mail, following action by the Iowa Department of Revenue. Palo Alto County Assessor Lois Naig and County Auditor Gary Leonard were notified recently of an equalization order for commercial property in the county to be increased for the current assessment year.
Palo Alto County received an equalization order for commercial property in the latest round of orders. Assessor Lois Naig was ordered to raise Commercial Realty by 16 percent. Commercial property excludes machinery and equipment that is mentioned in the Iowa Code, chapter 427A, outside and within incorporated cities.
No further equalizations were ordered for the county by the State Department of Revenue.
Every two years the Department of Revenue is required by law to equalize property tax assessments in all assessing jurisdictions in the state. Tax equalization is accomplished by increasing or decreasing, when necessary, the aggregate valuations of certain classes of property within each assessing jurisdiction. The reasoning behind the equalization order is to ensure that all classes of property have been assessed at the value defined by state law and that taxation statewide is applied equitably. An equal assessment level among counties is also necessary for a fair distribution of school aid and other state services to all counties.
The most recent equalization order is for the January 1, 2009 assessments. Preliminary orders are issued in the month of August and final orders are issued in October. Final equalization orders will be published in local official newspapers by October 15. Once the final orders are filed, taxpayers have an opportunity to appeal increases in their assessments to their local Board of Review from October 16-25.
There are assessors in all 99 counties and in eight cities in the state, for a total of 107 assessing jurisdictions. The Department of Revenue equalizes the three classes of properties in the state - agricultural, residential, and commercial. By State Code, the maximum number of equalization orders that may be issued is 321.
This year, the Department issued 31 orders for agricultural property, 16 orders for residential property, and 23 orders for commercial property for a total of 70 orders. The total number of equalization orders is down from 2007 when 59 orders were issued for agricultural property, 40 orders were issued for residential property, and 27 orders were issued for commercial property for a total of 126 orders. The overall change, including new construction and revaluation in residential and commercial, will be about 3%.
For two classes of properties, residential and commercial, assessments are based upon sales of those properties. Many of the jurisdictions in the state were within the 5% of the statutory assessment level on their property classifications and did not receive equalization orders.
The process of determining agricultural assessments is more complex. Agricultural real property is based on its productivity level, not market value. The Department of Revenue uses a formula to calculate the productivity value of ag lands for counties and cities.
Assessments for agricultural property are increasing 48% in 2009. This is primarily because of the high crop prices for the last two years, which tie into the productivity of the land. However, the statewide ‘rollback’ factor that is applied uniformly to all properties within a class will limit taxable value growth to 4% for agricultural property.
The Revenue Department provided information in advance to the assessors on the increase in productivity in the last year, and a majority of assessors made the assessment changes this past Spring, and subsequently did not receive equalization orders for agricultural lands.
The Department of Revenue website
http://www.iowa.gov/tax/locgov/prop09equalCh1.pdf)
shows the tentative adjustments that were issued to county auditors.
State law allows for authorized officials to request a hearing to present additional information affecting the equalization adjustments in their county. Also, jurisdictions may request an alternative method to accomplish the adjustments, other than the percentage increase ordered by the Department of Revenue.
Palo Alto County received an equalization order for commercial property in the latest round of orders. Assessor Lois Naig was ordered to raise Commercial Realty by 16 percent. Commercial property excludes machinery and equipment that is mentioned in the Iowa Code, chapter 427A, outside and within incorporated cities.
No further equalizations were ordered for the county by the State Department of Revenue.
Every two years the Department of Revenue is required by law to equalize property tax assessments in all assessing jurisdictions in the state. Tax equalization is accomplished by increasing or decreasing, when necessary, the aggregate valuations of certain classes of property within each assessing jurisdiction. The reasoning behind the equalization order is to ensure that all classes of property have been assessed at the value defined by state law and that taxation statewide is applied equitably. An equal assessment level among counties is also necessary for a fair distribution of school aid and other state services to all counties.
The most recent equalization order is for the January 1, 2009 assessments. Preliminary orders are issued in the month of August and final orders are issued in October. Final equalization orders will be published in local official newspapers by October 15. Once the final orders are filed, taxpayers have an opportunity to appeal increases in their assessments to their local Board of Review from October 16-25.
There are assessors in all 99 counties and in eight cities in the state, for a total of 107 assessing jurisdictions. The Department of Revenue equalizes the three classes of properties in the state - agricultural, residential, and commercial. By State Code, the maximum number of equalization orders that may be issued is 321.
This year, the Department issued 31 orders for agricultural property, 16 orders for residential property, and 23 orders for commercial property for a total of 70 orders. The total number of equalization orders is down from 2007 when 59 orders were issued for agricultural property, 40 orders were issued for residential property, and 27 orders were issued for commercial property for a total of 126 orders. The overall change, including new construction and revaluation in residential and commercial, will be about 3%.
For two classes of properties, residential and commercial, assessments are based upon sales of those properties. Many of the jurisdictions in the state were within the 5% of the statutory assessment level on their property classifications and did not receive equalization orders.
The process of determining agricultural assessments is more complex. Agricultural real property is based on its productivity level, not market value. The Department of Revenue uses a formula to calculate the productivity value of ag lands for counties and cities.
Assessments for agricultural property are increasing 48% in 2009. This is primarily because of the high crop prices for the last two years, which tie into the productivity of the land. However, the statewide ‘rollback’ factor that is applied uniformly to all properties within a class will limit taxable value growth to 4% for agricultural property.
The Revenue Department provided information in advance to the assessors on the increase in productivity in the last year, and a majority of assessors made the assessment changes this past Spring, and subsequently did not receive equalization orders for agricultural lands.
The Department of Revenue website
http://www.iowa.gov/tax/locgov/prop09equalCh1.pdf)
shows the tentative adjustments that were issued to county auditors.
State law allows for authorized officials to request a hearing to present additional information affecting the equalization adjustments in their county. Also, jurisdictions may request an alternative method to accomplish the adjustments, other than the percentage increase ordered by the Department of Revenue.
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