We used to round our tax rates to the nearest whole cent. Can we do this for education taxes?
No. The education tax rates you will receive about June 30 will be rounded at the 4th decimal point, e.g. $1.7211. Those are the rates that must be levied. Neither those rates nor the local agreement rate can be rounded. You may continue to round the municipal rate if you choose.
My municipality has a tax classification system authorized by our charter. Under the charter commercial property is assessed at 120% of appraised value. Does our charter affect how education taxes are levied?
No. It doesn't affect the education taxes, only the municipal taxes. 32 V.S.A. § 5402(b)(1).
Towns also levy taxes for highways and other municipal services. Are there different rates for homestead and nonhomestead properties?
No. Municipal taxes that pay for highways and other municipal services are levied on the municipal grand list. With the exception of the few communities that have different rates in accord with their charter, municipal taxes are not subject to tax classification.
The selectboard determines the amount to be raised from taxes and divides that figure by the total municipal grand list established by the listers. 17 V.S.A. § 2664. There is no adjustment for the common level of appraisal as there is no need to adjust the municipal values to a single point in time.
What if I don’t have a tax rate by June 30th?
Each year, some towns will not have a published education property tax rate by June 30. This may be due to legislative session delays, school merger budget checking, reappraisals, or lack of voted budget, and are posted as soon as they are verified by the Agency of Education.
In the rush to get tax bills printed, some towns have considered issuing tax bills with incorrect rates or partial rates. This can be costly and time consuming as a second, corrected round of bills would need to be printed once a rate is finalized. Ideally, a town should consider moving the first due date of their bills to a later date. This option may require select board approval, however, and could present a cash flow challenge that the town will need to address.
Towns without rates by June 30 also have the option to issue bills using the published “interim” Education rates. 32 VSA § 5402. Once the final Education rate is available, a second (final) tax bill would need to be issued.
My town is completing a reappraisal for the latest grand list. Using the common (CLA) of appraisal to adjust the tax rates doesn't seem fair. Our CLA was 85% based on last year's grand list. The tax bills for this year will use a grand list that is at 100% of market value. Will the tax rates be adjusted to account for reappraisals?
Yes. In those towns that have reappraised this year, the CLA used to calculate the rates will be the ratio of the reappraised current year education grand list to the equalized education grand list certified January 1, of that year. The Director of Property Valuation and Review is charged by statute with determining whether a reappraisal has occurred that warrants a new CLA. 32 V.S.A. 5406(c).
Is information about property tax adjustments and net payment amounts public information or should it be treated as confidential, not to be disclosed to the general public?
This information is confidential and should not be disclosed to the general public. You cannot provide a copy of a tax bill which contains a property tax adjustment credit amount (state payment) to anyone other than the taxpayer and those people identified below. This means that while property tax bills sent to property owners will show that amount of tax due that is from the owner (i.e., net including all adjustment), bills and information given to others will show only the gross (pre-adjustments) amount of tax except that municipal officers and the commissioner may provide the information to the following persons:
- An escrow agent, the owner of the property to which the adjustment applies, a municipality auditor, or a person hired by the municipality to serve as auditor;
- A lawyer, including a paralegal or assistant of the lawyer, an employee or agent of a financial institution as that term is defined in 8 V.S.A. § 11101, an employee or agent of a credit union as that term is defined in 8 V.S.A. § 11101, a realtor, or certified public accountant as that term is defined in 26 V.S.A. § 13(12) who represents that he or she has a need for the information as it pertains to a real estate transaction or to a client or customer relationship; and
- Any other person as long as the taxpayer has filed a written consent to such disclosure with the municipality.
What happens if the property sells after April 1? Will the tax bill still have the credit? Won't that complicate proration of taxes?
When homestead property is transferred, the property tax adjustment amount is allocated to the seller. The parties to the real estate transaction may agree otherwise. 32 V.S.A. § 6063(b).
What are the penalties for filing late or not filing at all?
When a claim is filed after April 15 the municipality retains $15 for the cost of issuing a new bill. 32 V.S.A. § 5410(c); 6066(d). If additional tax is due to the municipality as a result of correcting the tax classification, that amount may include a penalty 32 V.S.A. § 5410(i). Finally, under 32 V.S.A. § 5410(g) when notified by the Department that a property owner failed to declare a homestead or declared a nonhomestead property as a homestead, the municipality may impose a penalty as follows:
- If a declared property is not a homestead and the homestead rate is higher than the nonhomestead rate, the penalty may be set at a rate up to 3% of the education tax on the property.
- If a declared property is not a homestead and the homestead rate is lower than the nonhomestead rate, the penalty may be set at a rate up to 8% of the education tax on the property.
- If a homestead is not declared and the homestead rate is lower than the nonhomestead rate, the penalty may be set at a rate up to 3% of the education tax on the property.
- If a homestead is not declared and the homestead rate is higher than the nonhomestead rate, the penalty may be set at a rate up to 8% of the education tax on the property