It’s tax time for property owners in Tooele County.
Annual notices of property values and tax rates have reached the mailboxes of property owners. Taxing entities have held public hearings and adopted budget and tax rates that affect the size of the annual property tax bill that will arrive in November.
The amount of tax owed each year depends on the value of property owned and the tax rates adopted by all the entities that have the power to levy taxes on a piece of property.
The assessed value of a parcel of property should equal the retail value of the property as of Jan. 1, according to Tooele County Assessor Wendy Shubert.
“We determine property values,” Shubert said. “We do not set the tax rate or determine how much tax property owners pay.”
Each year the county assessor is required to determine the current value of each parcel of property in the county.
Once every five years state law requires a detailed on-site review of property be done by the county assessor’s office to determine the assessed value.
Between detailed reviews the assessor’s office updates property values using an industry standard survey of construction costs that is indexed by location to determine the value of structures. Land values are determined by looking at the sales price of comparable properties in the same neighborhood.
The Utah State Tax Commission carefully monitors how close sales price of properties matches the assessed value of the property in each county by using a variety statistical methods.
In 2013, the average sales price of residential property sold in Tooele County was 95 percent of the assessed value, according to the Utah State Tax Commission.
The goal is to be between 90 to 110 percent, according to Shubert.
If a county’s assessed value deviates outside of the target range, the state tax commission may order the county assessor to increase or decrease assessed values countywide or order the county to reevaluate property values.
While the county assessor determines the value of each parcel of property, the tax rate is determined by the elected governing body of entities endowed by the state with the ability to raise, or lower, tax rates.
There are 19 taxing entities in Tooele County, including eight cities and towns, the school district, six special service districts, a mosquito abatement district, one fire district, and one water conservancy.
The county treasurer collects property tax on behalf of all 19 entities.
Each entity has a geographic boundary. The different combinations and permutations of taxing entities create 40 different taxing districts. Each district is a geographical area with a different total property tax rate depending on which taxing entities are included in its boundaries.
This explains why a property owner in Ophir pays a property tax rate of .011843 to Tooele County, the school district, the town of Ophir, and the Rush Valley Water Conservancy, while a property owner in Stansbury Park pays a property tax rate of .016258 that includes Tooele County, the school district, Stansbury Park Improvement District, Tooele Valley Mosquito Abatement District, Stansbury Green Belt Service Area, Stansbury Recreation Service Area, North Tooele County Fire Protection District and the Tooele County Municipal Services Tax.
Each year the county auditor, using the assessed values provided by the assessor, computes a tax rate for each taxing entity that will result in the entity receiving the same amount of tax dollars, except for taxes received from new growth, as it did the previous year.
New growth is any taxable value that is on the tax rolls for the current year that wasn’t on the rolls the previous year.
The state tax commission approves the assessor’s calculations and the approved rate becomes known as the “certified tax rate.”
The certified tax rate protects taxpayers from receiving a large bill when property values balloon. It also allows taxing entities to receive the same amount of money even when property values plummet.
Because the tax rate floats up and down opposite of total property value, the notion that taxing entities receive more money as a result of property value increases is false, according to Tooele County Auditor Mike Jensen.
However, because changes in property values may vary from neighborhood to neighborhood, individual property tax owners may find that their payments rise even though the certified tax rate decreases.
Ideally, the value of a parcel moves up and down at the same rate as the total assessed property value, and the floating tax rate means that the amount of property paid by the property owner remains constant.
However, when the value of a parcel increases greater than the average parcel, the property owner may end up owing more property taxes that year, even though the certified rate has stayed the same or lowered.
Meanwhile, somewhere else in the tax district a property owner is paying less because their property changed in value less than the average parcel.
If the taxing entity adopts the certified tax rate, the only increase in property tax revenue they will receive will come from new property, not as the result of increased property values.
If a taxing entity plans to adopt a tax rate higher than the certified rate, the taxing entity must go through a process defined in state law as “truth in taxation.”
Truth in taxation laws spell out specific requirements for public hearings and notices for tax increases, including the wording and size of public notices.
Truth in taxation hearings and final budget adoptions take place in August and the state tax commission notifies the county auditor by Sept. 1 that final tax rates for each entity have been approved.
The county auditor must mail a notice of property value and tax changes to the property owner on record for each parcel of property by July 22.
The notice includes the date and time of required public hearings for any taxing entity that plans to adopt a tax rate higher than the certified rate. It also includes information on how to appeal the determination of property valuation.
After final budgets are approved by taxing entities and the state tax commission approves its tax rates, tax bills must be mailed by the county treasurer by Nov. 1 and taxes must be paid by Nov. 30.
The only taxing entity in Tooele County that adopted a tax rate larger than the certified tax rate for 2014 is Tooele County School District.
The Tooele County School Board voted earlier this month to keep their tax rate at the 2013 certified rate of .009593 instead of lowering the tax rate to the 2014 certified rate of .009233.
The Tooele County Commission adopted a new municipal services tax with a rate of .000855.
The municipal services tax rate will be paid by all property owners in unincorporated areas of the county and will be used to fund law enforcement, road maintenance, building and planning services and other city-like services the county provides to unincorporated areas.