Who Does What? A Guide to Minnesota's Property Tax System
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MINNES01A COUNilES
ASSOCIATION Of
rY\nrnunties.orq
www.mnmsba.or
M\NNESOTA TAX COURT:
Small claims or regular
The review board may change
the estimate of the market value
of the classification.
division.
property owners mail in their payments (due in twO installments on May 15 and
October 1 5; except that the second installment of taxes on agricultural property is
due on November 15).
of the following year.
LIMITED MARKET V ALUE: A state imposed limit on property value
increases for the purpose of calculating property taxes.
ST ATE BOARD OF EQUAUZA T\ON:
Commissioner of Revenue.
15
Meets between Apr
June 30
and
p~onerty o,"n"'r~
in tn~ county and gives tne list
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-
ists.
LEVY LIMIT: The amount a local unit of government is permitted
to levy for specific services under state law.
TAX CAPACITY: The valuation of property based on market value
and class rates, on which property taxes are determined.
November 2006
COUNTY BOARD OF EQUAUZAT\ON:
. County board of commissioners.
Meets for tWO weeks in June.
Calcuiates the amount of each property owner's proposed state paid credits and
net tax amount.
tne final levy
LEvY: The imposition of a tax, associated with the property
tax.
HOMESTEAD: A residence occupied by the owner.
INDMDUAlINCOME TAX: A state tax on the income of residents
and non-residents with Minnesota sources of income that is
deposited into the state general fund.
properties.
STATE GENERAL PROPERTY TAX: A state-imposed property
tax on commercial, industria\. and seasonal recreational
STATE SALES TAX: A state tax (6.50/0) levied on the sale of goods
and services that is deposited into the state general fund.
C\TY OR TOWNSH\P BOARD OF
APPEAL AND EQUAUZA T\ON:
. The city councilor township
board.
between April
HIGHWAY AID: Motor fuels tax and license tab money the state
distributes to counties, cities and townships for highways and
bridges.
SALES RATIO STUDY: A study conducted by the
Department of Revenue of open market property sales, which
is then compared to local assessments to ensure that local
assessments adequately reflect the market.
BOARDS
Of APPEAL
AND
EQUALIZATION
Meets
31.
and May
GENERAL PURPOSE AID: Aid given to units of government to
be used at their own discretion. Examples are Local Government
Aid and County Program Aid.
FISCAL DISPARITIES: A program in the Twin Cities metropolitan
area and on the iron range in which a portion of the commercial
and industrial property value of each city and townshiP is
contributed to a tax base sharing pool. Each city and township
then receives a distribution of property vaiue from the pool based
on market value and population in each city.
EDUCATION AID: The total amount of state dollars paid for K-12
education. This aid is paid to the school districts.
PROPERTY TAX REFUND: A partial property tax refund prograe
for those who have property taxes out of proportion with their
income. This program is available to homeowners and renters.
PROPERTY TAX: A tax levied on any kind of property.
MARKET VALUE HOMESTEAD CREDIT: A state credit to reduce
the property tax paid by a residential homestead to the local
taxing jurisdiction.
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. Property owners who disagree with
the assessor may appeal to:
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Determines the tax capacity rates and also uses the state general tax rate by
dividing the proposed levy by the proposed total amount of tax capacity in the
taxing district.
Auditor uses state general tax rate to compute taxes (certined by the Commissioner
of MN Dept. of Revenue).
FINANCE DEPARTMENT
AUO\TORITREASU RER
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Send iinal levy amounts to: ..............
Hold Truth-in-Taxation (TnT) hearings on budgets (if required by
Send iinallevy amounts to:. · · · · · · · · · · · · · ·
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state law).
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Estimate
property
Prepare proposed budget/levy amounts
the costs of those services and determine what portion wiil
taxes
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Determine the services (such as street maintenance, nre and police protection) to
be provided in the coming year.
come from
TAXING DISTRICTS
(yOUR SCHOOL DISTRI0, CITY OR TOWNSHIP, COUNTY, ETC.)
MARKET V ALUE AGRICULTURE CREDIT: A state creditto reduce
the property tax paid by agricultural homesteads to the local
taxing jurisdiction.
Sends out notices in tne spring to "all property owners.
Multiplies the estimated market value of each piece of
The result is the tax capacity.
Adds together tne tax capacities for all
the property
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in tne taxing district and gives the total to:
property by the tax capacity percentage set
couNTY PROGRAM AID: State property tax relief aid to counties,
distributed with a formula based on needs (households on
foodstamps, age of the population, number of serious crimes)
and tax base equalization for counties with smaller tax bases.
clASS RATES: The percent of market value set by state law that
establishes the property's tax capacity subject to the property
tax.
CATEGORICAL AID: Aid given to a local unit of government to
be used only for a specinc purpose.
CIRCUIT BREAKER: See "Property Tax Refund.
LOCAL GOVERNMENT AID (LGA): A state government revenue
sharing program for cities with low property wealth or high
service burdens that is intended to provide an alternative to
the property tax.
MARKET VALUE: An assessor s estimate of what property would
be worth if it were sold.
LOCAL TAX RATE: The tax rate usually expressed as a percentage
of tax capacity, used to determine the property tax due on a
property
LOCAL SALES TAX: A local tax, authorized by the state, levied on
the sale of goods and services to be used for specific purposes
by the local government.
Locates tne property to be taxed, estimates its
a class according to its use.
by law
for its clasS.
ASSESSOR
market value (hoW much the property would sell for in today's
A
market), and assigns it to
14
M\NNES01A COUN1\ES
ASSOC\AT\ON OF
LMC
League of Minnesota Cities
Cities promoting e:l<ceYence
'06 CLI\SS RI\1E
1.00
1.25
0.55
1.00
1.00
~*' T- tA,.w.,-.-
W\-\~11\-\E'l M~E, \-\OW 1\-\E'l WORK
1he classification rates on selected propertieS for taxes payable are shown below:
seasonal RecreatlOna\ Residential
1.25
1.5
1.00
1.25
1.25
1.5
Mrlcu\tural land 8r. Buildings
Homestead 3
Up to $600,000
over $600,000
Nonhomestead
tAlsce\\aneous properties
Golf courses (Open to public)
Nonproflt service organizatiOns
Fraternity I sorority hoUses
ManufactUred home parK land
Metro'lndoor ree. facilities
Non corn mer Cia I aircraft hangars
PROPERTY TYPE
Up to $500,000
over $500,000
'06 CLI\SS RI\1E
0.0450/0
1.00
1.25
Olsabled homestead uP to $32,000
Residentla\ Homestead
PROPERTY 1'(PE
PI
p..YMI
1.00
'\.25
1.25
'\ .25
Up to $500,000
over $500,000
s\ng\e un\t
Up to $500,000
over $500,000
2-3 unit and undeveloped land
Residential NonhOmestead 1
'J\S\1 'lOUR lOC~lI>5SESSOR'S OffiCE
. C\lec\<' t\le 1acts.
. compare neighboring propert\' values.
. see\<. an ad~ustment. \
'\.5
2.00
2.00
commerdal-lndustrial-NbliC Utilit't
Up to $150,000
over $ 150,000
~partmeots
Regu\ar
ElectriC generatiOn machinery
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/.JIh'W fa U,5e ,~siJi'atian rtUPs;
'" . "a\ued at c90 000 and 'Jour local taX rate is 1.35\135% of taJt capacity)
EJtample: Suppose your "of1\e IS · ~,
\ev\es
'\ .00
school 0 erati ng referendum levies (sometimes called" el<.cess leVY" referenda) a nd all cou nt)l, cit)l, and tOwnship referendum
are levie: on referendUm ma r\<.et val ue. school debt levies are levied against al \ property based on net tal<. ca paClt)l.
2 Includes dwellings located on agricultural nonhomestead property.
, \'louse, garage, and one acre have same clasS rates and are generallY treated the same as
fes\dent\a\ \lomestead.
1.00
'\ .25
seasonal Recreationa\ commerc.la\
Homestead resorts
seasona\ resorts
Up to $500,000
over $500,000
~PPE~l10 c\1'l OR lOW NSH\P uBO~RO Of RE'lIEW.
. Meets in IWri\ or Ma\}.
. Mpeals in person or by letter.
. call cit'! or township cler\<.for appointment.
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~PPE~l10 COUNl'l uBO~RO Of EQU~UV.lI0N"
. Meets tor twO wee\<.s in June.
. ,e...ppea\ in person Of b\} \etter.
. Call county auditor or assessor for appointment.
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3-S1EP APPEAL
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1HE O\~GR~N\ BELOW SHOWS 1HE S1EPS \N
CON1ES1\NG 'lOUR PROPER1'l '.J ~lU~ 1\ON:
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SM~LL cLA\MS ON\S\ON
. Attorne\} not necessary.
. Decisions are 1ina\.
. use for your home, or any propert\' assessed und
$'\00,000.
~PPE~l10 MINNESOl ~ l~){ COURl
Mpeal by Mril 30 of year following assessment.
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REGULAR ON\S\ON
. Attorne\} recommended.
. Decisions appealable to Supreme court.
. Can be used tor an\} properW.
_ _ "cpr! for propert\' assessed over $100,000.
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1-S1EP APPEAL
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