National Association of Counties. A Look at County Revenue Authority A State by State Report

Transcription

1 A Look at County Revenue Authority A State by State Report September 2008

2 A Look at County Revenue Authority A State by State Report Written by Joshua McLaurin Research Honors Intern Edited by Jacqueline J. Byers Director of Research September 2008 zabout NACo The Voice of America s Counties The National Association of Counties (NACo) is the only national organization that represents county governments in the United States. Founded in 1935, NACo provides essential services to the nation s 3,066 counties. NACo advances issues with a unified voice before the federal government, improves the public s understanding of county government, assists counties in finding and sharing innovative solutions through education and research, and provides value-added services to save counties and taxpayers money. For more information about NACo, visit

3 For more information about this publication, please contact: Jacqueline Byers, Esq. Director of Research and Outreach Community Services Division ( (202) * jbyers@naco.org Table of Contents Overview of County Revenue Authority. 1 State by State Summaries Alabama. 4 Alaska. 5 Arizona. 5 Arkansas. 6 California. 7 Colorado. 9 Connecticut. 10 Delaware. 10 Florida. 11 Georgia. 13 Hawaii. 14 Idaho. 15 Illinois. 15 Indiana. 17 Iowa. 18 Kansas. 19 Kentucky. 21 Louisiana. 22 Maine. 23 Maryland. 24 Massachusetts. 26 Michigan. 26 Minnesota. 27 Mississippi. 28 Missouri. 30 Montana. 31 Nebraska. 32 Nevada. 33 New Hampshire. 35 New Jersey. 35 New Mexico. 36 New York. 38 North Carolina. 39 North Dakota. 40 Ohio. 42 Oklahoma. 43 Oregon. 44 Pennsylvania. 45 Rhode Island. 46 South Carolina. 46 South Dakota. 48 Tennessee. 49 Texas. 50 Utah. 51 Vermont. 53 Virginia. 53 Washington. 54 West Virginia. 56 Wisconsin. 57 Wyoming. 58 Appendix. 59 Table 1a County Authority in and Property Taxes State by State Table 2a County Authority and Sales and Use Taxes; Franchise Taxes Table 3a County Authority and Excise Taxes; and Miscellaneous Taxes Table 4a County Authority and License and Permits; and Fees and Charges for other Services

4 Overview of County revenue authority County revenue authority encompasses the variety of taxes and fees that a county may levy and collect in order to finance its normal operations, special projects, and general indebtedness. The revenue authority of counties varies significantly by state simply because the provisions enabling counties to generate and receive tax revenues are a product of each state s statutes. A county with a chartered government or some other form of home rule authority may be able to introduce new taxes and fees with little restraint in response to their perceived needs. In contrast, a county within a state that operates under Dillon s rule, or a legal framework limiting counties to the authority that a state chooses to provide on a case-by-case basis might have to petition its state legislature for new authority to impose even the smallest fee. In addition to outright restraints on county revenue authority enacted by a state, a county wishing to implement new taxes may be subject to participative requirements designed to enhance democracy. Sometimes, a county may only implement a new tax or fee upon the receipt of a petition from a certain percentage of the electorate. Most often, however, the primary participative constraint on county revenue authority is the requirement for a county to present the question of a tax s implementation to voters within the appropriate taxing district on a special or general ballot. In almost all such elections, a county ordinance levying a new tax may only be implemented if it receives the approval of a majority of qualified voters, as defined by state law. This publication attempts to identify the taxes for which approval in an election is required; it does not attempt to identify every instance in which a petition is necessary. Despite the differences among states, counties in almost all states share a basic revenue structure. The general property tax is at the core, and is supplemented by an array of taxes and fees on production and consumption of goods and services. The aim of this publication is to provide a summary of county revenue authority on a state-by-state basis in a way that demonstrates this basic structure while highlighting the differences among the states. Therefore, each state s summary may not include provisions that are either almost universal in scope across all states or that are specific to only one county or a few counties within the state. Examples of provisions nearly universal to every type of tax include the following: Retention of an administrative fee. A taxing unit that collects a tax on behalf of another taxing unit may usually retain a small percentage of the revenues it collects from the tax as an administrative fee. Use of revenues to pay bonds. If a tax is authorized for a special purpose, a county may almost always use revenues from that tax to pay bonds issued for that purpose. Complete information is available in the actual text of state laws governing county revenue authority discussed in this publication. Related citations are also listed for each state. Property taxes zoverview In general, property taxes constitute the main source of a county s revenue. Property taxes are ad valorem taxes, which are simply taxes levied according to value. A county levies a property tax by determining a tax rate to be multiplied by the assessed value (or taxable value) of property under its jurisdiction. Therefore, in contrast to the taxes on most goods and services where a county can adjust the tax rate in order to produce the needed amount of revenue, property taxes have an additional component. That is, the assessed value of property which determines what the tax rate must be in order to produce the required revenues. State law generally places a restriction on at least one of the two major components of property tax revenues in order to help control the taxpayer s burden as property values increase over time. zlimits on assessed value Limits on the assessed value of property apply in one of two ways. They may apply to the appraisal process in which the original value of a property is determined or to the assessment process, in which the appraised value of a property is adjusted to produce the final valuation to which a tax rate will directly apply. Most property is appraised according to its fair market value, or the price that the property would hypothetically receive on the market in a fair exchange between two parties. However, state law might mandate a different system of valuation such as one in which property is appraised at a reduced value according to the way in which the property is used. Additionally, the assessed value of property may be adjusted if a state mandates the implementation of an assessment rate, or a percentage of appraised value, that is less than 100 percent. Finally, state law may prohibit the assessed value of property from increasing by more than a certain percentage each year even if the appraised value increases substantially. Changes in the assessed value under a county s jurisdiction resulting from newly added property, new improvements to property, or a change in ownership are generally not subject to this type of limit. zlimits on the tax rate A state may also put limits on the maximum property tax rate that a county may impose. Property tax rates and limitations on such rates are expressed as mills: one mill is equivalent to $1 of tax for every $1000 of assessed value. Limitations on millages (tax rates) might vary according to whether a rate is imposed for general purposes or special purposes in addition to a number of other variables. In many cases, a county may exceed statutory limitations on its tax rates, but only after satisfying a participative requirement such as holding a public hearing or a referendum. In most states, however, the part of a county s tax rate that the county imposes in order to finance general indebtedness is exempt from any statutory limits that otherwise may be imposed on the rate. A Look at County Revenue Authority, a State by State Report 1

5 zlimits on overall increases in revenues A third option in enacting limitations is to limit increases in property tax revenues directly. Some states do not put limitations on assessed values or tax rates but instead dictate a maximum percentage by which property tax revenues may increase from previous tax years. States imposing these limitations will sometimes attach a provision that allows adjustment of revenues for inflation from year to year so that they do not force decreases in real revenues upon counties. Many states have a board of equalization (at the county or state level or both) that is charged with reviewing assessments and tax rates each year so that it may fix errors or adjust values and rates to keep them within statutory limits. ztypes of property and major exemptions Property subject to taxation generally falls in one of two categories: real property or personal property. Real property, real estate and whatever improvements or structures on it that a state classifies as such, is the source of most of a county s property tax revenues. Because real property tax is such a large source of income for counties, it also presents an opportunity for manageable tax relief for residents. Homestead exemptions are often available for residents paying taxes on the property where they have permanent residence. More substantial homestead exemptions may be available for seniors, persons with disabilities, low-income households, and veterans. Personal property consists of tangible personal property and intangible personal property. Tangible personal property includes any material, mobile property, ranging from small household items to motor vehicles and boats. Intangible personal property includes nonmaterial possessions such as securities and is often exempt from property taxation. zspecial districts In lieu of taxing the entire county for a service only to be provided in one part of it, a county might have the option of creating a special taxing district in which residents pay an additional property tax for a special benefit they receive within its boundaries. Although these tax revenues often do not belong to the county since such a district is usually a taxing entity with its own budget, a county s power to create a special taxing district can be considered revenue authority by proxy because it allows the county to provide a service without increasing its own budget. However, this flexibility does not exist in all cases, since occasionally state law will include special taxes levied within taxing districts in the same group of taxes subject to state statutory limitations on county taxes. Additionally, a county may have to satisfy a participative requirement such as holding a public hearing or a referendum even to create the district in the first place. Selective tax credits by district are another possibility. A county may have the authority to create enterprise zones or development districts in which it eases the local tax burden in order to attract businesses. A county may also have the authority to use tax increment financing or another strategy in such a district in order to undertake development projects. Sales and use taxes Many states give counties the authority to levy sales and use taxes at a rate or a range of possible rates on the same sales, leases, and rentals on which the state itself levies those taxes. The use portion of the tax applies to any tangible personal property used or stored in the county that was not subject to a sales tax within the county. Local sales and use taxes come in two types: taxes for general purposes and taxes for special purposes. Special-purpose sales and use taxes are generally temporary taxes designed to raise a specified amount of revenues to be used for a specified purpose. However, a special-purpose tax may last indefinitely if its designated purpose is not temporary, such as funding for mass transit. Special-purpose sales and use taxes are almost always local option taxes, which require the approval of qualified voters in an election. General-purpose local sales and use taxes may be local option taxes depending on the state, but some states give counties the authority to levy certain general-purpose sales taxes without going to the public through a referendum. Franchise taxes and fees Although the word franchise can refer to corporations generally, franchise taxes and fees in this publication refers to taxes and fees imposed on public utilities providing cable television, electric, gas, telephone, water, or sewer services, for the use of public rights-of-way or simply for the right to operate within the county. These levies are regulatory in nature because they accompany the county s authority to grant franchises to such utilities generally. It is important to note that the absence of a county s authority to levy franchise taxes or fees does not necessarily imply the absence of its authority to grant franchises at all. Franchise taxes and fees usually take the form of a pro rata levy on the yearly gross proceeds of public utilities, but they can also take the form of flat charges on utilities or their customers. Excise taxes Like franchise taxes, excise taxes can refer to a variety of different taxes, even including sales taxes, depending on a state s definition of the term. For the purposes of this publication, excise taxes are pro rata taxes on the gross proceeds from sales of specific goods and services that are designed to control the provision of those goods and services more directly or to provide a base of funding for county services related to those goods or services. The five major categories of goods and services subject to excise taxes described in this publication are alcohol, motor fuel, transient occupancy, motor vehicle rental, and tobacco. Often, the revenues from these taxes must be dedicated to specific purposes related to the object of the tax, such as alcohol education or treatment programs, county roads, the promotion of tourism, or other respective projects. 2 A Look at County Revenue Authority, a State by State Report

6 Miscellaneous taxes Taxes labeled as miscellaneous taxes may have some regulatory capacity, but more often than not they are taxes levied for general revenue purposes that otherwise do not fit well in another major category. The more prominent miscellaneous taxes identified in this publication include taxes on motor vehicles, taxes on the transfer of real estate, taxes on the severance of minerals from county land and taxes on the ownership or harvest of timber. These taxes also generally take the form of pro rata levies on the gross proceeds or total value subject to taxation. Although county income taxes are not listed on the table included in this publication, it is noteworthy that 18 states grant the authority to levy income taxes to all or at least some of their local governments. Indiana and Maryland counties are the only ones that currently uniformly collect income taxes. Licenses and permits Some states may give counties general authority to levy a tax on any businesses or occupations as long as the rate is standard within any given class or business or occupation. Technically, this type of authority is composed of two different types of taxes: a general business license tax, and an occupational or professional tax. Because they are ultimately very similar, this publication lists them both in the same category. A county also may have the authority to levy various license taxes, usually at specified rates, for the use of county or state licenses within the county. The most prominent type of authority in this regard is the authority to levy license taxes on manufacturers or distributors of alcoholic beverages. Fees and charges for services Although counties generally have the authority to levy a variety of fees associated with the use of county courts, the services of a county clerk, or other general government operations, there are a few fees that some counties may charge for certain services that are worth noting due to their relative regularity. Such fees include those imposed for emergency 911 services, regulation of development (impact fees), sanitation services, and water or sewer services. Usually, a county may not use proceeds from a fee for any purpose except payment of the costs of providing the corresponding service. It is important to keep in mind that although a county may not have the authority to charge a fee for a service directly, it might have the authority to establish a service district in which such a fee is payable to the district for the service in question. A Look at County Revenue Authority, a State by State Report 3

7 Alabama Code of Alabama: , 22-30B, 28-3A, , , to , to , , , , , to , , , 40-14A-26, , , , , , , to , 40-22, , , , , , ; Constitution of Alabama: Amendment 373; South Central Bell Telephone Co. v. Alabama ( ) 526 U.S. 160 (1999) Alabama requires appraisal of property at its fair market value unless another system of valuation is specified. Property is then assessed at a percentage of its appraised value that corresponds to its classification. A county may petition for a change in an assessment rate for a classification of property of as much as 5%, provided that the county can demonstrate a specific level of imbalance between classifications in generating revenue, and provided that the change receives the approval of the state legislature and a majority of qualified voters in an election in the county. While there is no explicit limit on the assessed value per property per se, there are limits on the tax rates that some counties may employ. The Alabama Constitution mandates that each county must employ one uniform tax rate throughout its jurisdiction, and it previously restricted that rate in any given county to 24.1 mills or less. However, Constitutional amendments have enabled many counties to levy taxes at rates greater than 24.1 mills. Valuation of Property by Classification Classification I. Utilities II. Other unclassified property III. Residential, agricultural, and historical Assessment rate 30% 20% 10% Almost all personal property is classified as Class II property, the category of miscellaneous property to be assessed at 20% of its fair market value. Motor vehicles constitute a single category of classification and are assessed at 15% of their fair market value. A county may implement a local sales tax if it is authorized by a general or local resolution. Special purpose sales tax A county may levy an additional sales tax for public school purposes. The county may also levy a privilege tax on businesses as a part of this sales tax. State allocations Each county receives a portion of state sales tax revenues partly in proportion to its population. It must use its revenues for health services or extension services. State allocations In 1999, the Supreme Court ruled Alabama s franchise tax system unconstitutional. In the fiscal year starting October 1, 1999, the State mandated that each county receive the amount that would have been distributed to it prior to the ruling. Since the fiscal year beginning in September 2000, the state has mandated an annual increase in the amount distributed to each county by three fourths of a percent. Motor fuel Each county receives a portion of the revenues from a state tax on gasoline partly in proportion to its population. It must use its revenues for highway purposes. Some counties may also be authorized to levy additional gasoline and motor fuel taxes. Occupancy Counties receive a portion of the revenues from state taxes on the rental of transient lodging. Any county that receives such a portion must use its revenues for the promotion of tourism. Financial institutions tax Each county receives one-fourth of the revenues collected within the county from a state tax on the net income of financial institutions. A county may not levy additional taxes on financial institutions, but it might have limited authority to impose fees for the issuance of licenses to such institutions. Hazardous waste tax Each county receives a portion of the revenues from a state tax on commercial sites engaged in the disposal of hazardous waste. Any county containing such a disposal site also receives a portion of the proceeds from state fees imposed on certain disposal and treatment processes occurring there. Manufactured housing registration fee Each county receives 25% of the proceeds from state fees imposed on manufactured homes within the county. The county receives 50% of such proceeds if the manufactured home is located in an unincorporated area. Mineral documentary tax Each county receives 35% of the revenues collected within the county from state taxes on leaseholding of land that could produce oil, gas, or other minerals in the future. Real estate tax Each county receives a third of the revenues collected within the county from a state tax on the registration of property through a document such as a deed or a bill of sale. 4 A Look at County Revenue Authority, a State by State Report

8 Severance taxes Each county receives the net revenues collected within the county from a state tax on the severance of raw materials levied at a rate of $0.10 per ton of materials sold. A county must use any revenues from this tax for construction and maintenance of county roads unless it specifies another relevant project such as the upkeep of bridges or the reclamation of lands from which the materials have been severed. Some of the revenues from state severance taxes on oil and gas must be dedicated to public schools. Additionally, each county receives all the revenues collected within the county from a state tax on the severance of coal or lignite with a rate of $0.20 per ton of coal or lignite severed. However, if the severance of coal or lignite occurred within municipal limits or police jurisdiction, then the county only receives 50% of the revenues. TVA payments in lieu of taxes Each county receives a portion of the payments that the state receives from the Tennessee Valley Authority in lieu of taxes. Counties served by TVA receive larger portions than dry counties, which are not served by TVA. Alcoholic beverages A county may levy license taxes on establishments authorized by the state to sell alcohol with the exception of liquor stores. Businesses / occupations Each county receives a portion of the proceeds from license fees imposed on businesses by the state. Counties do not have authority to charge any noteworthy fees not already listed. Alaska Alaska Statutes: , , , , , , , , , , to , , , to , ; Constitution of the state of Alaska: Article 10 Section 1 Alaska requires appraisal of property at its fair market value unless another system of valuation is specified. Property is then assessed at 100% of its appraised value. A borough may levy property taxes on the assessed value under its jurisdiction at a rate not to exceed 3%. Overall, a borough may not impose a tax rate that produces average revenues of $1,500 or more per person per year in the borough. Furthermore, a borough may not levy taxes on value that, together with all other taxable value in the borough, would exceed an amount equal to 225% of the average per capita market value of property in the state multiplied by the number of residents in the borough. Special districts A borough may establish taxing districts for special projects and improvements, but additional taxes in these districts are still subject to overall property tax limitations. Land in a farm unit that is used for farming and property dedicated to a conservation easement are subject to valuation according to such uses instead of market value. Tangible personal property is subject to assessment and taxation in the same manner as real property; however, intangible personal property is exempt from property tax. Local option tax Each borough has the general authority to levy a sales and use tax. Implementation of the tax requires the approval of a majority of qualified voters in an election. zall other taxes and fees A borough may levy a variety of taxes or fees under its broad home rule authority provided that state law does not explicitly prohibit such taxes. Arizona Arizona Revised Statutes Annotated: , , , , , , , , , , , , , , ; Arizona Constitution: Article 9 Sections 1, 2, 18, 19 Arizona requires appraisal of property at its fair market value unless another system of valuation is specified. The assessed or taxable value of property may never exceed its market value. Additionally, the assessed value of residential property in a year may not exceed the property s assessed value from the previous year by more than 10% of the previous year s value added to a fourth of the difference between the two years value. All taxes on the same class of property must be uniform within any given jurisdiction. The tax rate that a county imposes on residential property may not exceed 1%. Exceptions to this specific limitation include any taxes levied in special districts A Look at County Revenue Authority, a State by State Report 5

9 or taxes for bonded indebtedness. Total revenues from county ad valorem taxes may not exceed those from the previous year by more than 2%. A county may levy a secondary property tax in excess of all these limits with a specified purpose, duration, and maximum amount to be collected each year, provided that the tax is approved by a majority of qualified voters in an election. Exceptions to some of these limits might include taxes on property used in certain utilities, property used in the production of minerals and energy, and most personal property. Special districts A county may create special taxing districts for the following purposes: fire protection, community park maintenance, sanitation, and hospitals. Creation of one of these districts is by an appropriate petition. Various classifications with different systems of valuation include: Classification Assessed value Agricultural Historical Golf courses Determined using the income approach to value Variable: multiple possible classifications that could carry an additional tax $500 an acre Household goods with commercial usage and all units of personal property valued at $50,000 or more are subject to personal property tax. The state legislature may adjust the value at which personal property loses its exemption according to inflation. A county with a population of less than 1,500,000 may levy transaction privilege taxes on the gross proceeds of businesses at rates not to exceed 10% of the rates that the state imposes on different classes of businesses. Some of these taxes include taxes on the gross receipts of public utilities, taxes on jet fuel, occupancy taxes, and severance taxes. Special purpose local option taxes A county with a population of 400,000 or less may levy additional privilege taxes on the gross proceeds of businesses at rates not to exceed 10% of the rates that the state imposes on different classes of businesses, excepting a couple types of businesses for which the rate of the county tax is specified differently in state law. A county must use the revenues collected from these additional taxes for regional road purposes. Implementation of these taxes requires the approval of a majority of qualified voters in an election. Occupancy and jet fuel A county may levy taxes on jet fuel and the rental of transient lodging under its sales tax authority. Counties do not have evident authority to levy any noteworthy miscellaneous taxes not already listed. Counties do not have evident authority to levy any noteworthy license taxes not already listed. Counties do not have evident authority to charge any noteworthy fees not already listed. Arkansas Arkansas Code Annotated: , , , , , , , , , , , , , , , , , to , , , ; Constitution Of The State Of Arkansas: Article 16 Sections 5, 14, 16; Amendment 79 Sections 1, 3, 4 Arkansas requires appraisal of property at its fair market value every three years unless another system of valuation is specified. Property is then assessed at a rate not to exceed 20% of its appraised value. The assessed value of any one unit of property may not rise by more than 10% from one year to the next. A county may levy property taxes on the assessed value under its jurisdiction at a rate not to exceed five mills. Furthermore, overall property tax revenues in a county may not increase by more than 10% from one year to the next. These limits do not take into account increases in revenues collected from tangible personal property or the property of public utilities. A county may levy franchise taxes and fees under its sales tax authority. 6 A Look at County Revenue Authority, a State by State Report

10 Various exceptions to valuation at free market value include: Classification Residential (primary residence) Agricultural Commercial land (or vacant residential land) Assessed value Determined according to the property s value as a residence Determined according to its productive value Determined according to use value Personal property, both tangible and intangible, is subject to ad valorem taxation at the same rates as real property. A county may only levy personal property taxes at rates higher than those of real property if maintaining its personal property tax rates at that level is necessary to meet requirements associated with bonded indebtedness. Special purpose local option taxes Counties do not have the authority to levy general sales or use taxes. However, a county may levy a 0.25% sales and use tax for the purpose of building and maintaining public transportation facilities if the tax receives the approval of a majority of qualified voters in an election. Additionally, a county may impose a sales and use tax in increments of 0.25% not to exceed 1% for any combination of the following purposes: a solid waste management system, repayment of bonds, maintenance of capital improvements, and acquisition or construction of capital improvements. A county may earmark a portion of the revenues from this tax for a school district partially or totally located within the county for its general usage. zfranchise, excise, and miscellaneous taxes Each county has the general authority to levy any taxes not explicitly prohibited by law with the exception of taxes on horse or dog racing enterprises, taxes on alcohol, taxes on tobacco, and additional taxes on motor fuel. Motor fuel Each county receives a portion of the revenues from state taxes on motor fuel. It must use its revenues for the construction and maintenance of rural state highways. Motor vehicle tax A county may levy a tax on the ownership of motor vehicles for the privilege of using public roads within the county. Alcoholic beverages A county may charge license fees for sales of vinous (excluding wines), spiritous, or malt liquors within its unincorporated areas. The amount of a given fee may not exceed half the amount of the fee charged by the State for the corresponding license. Auctions and theaters A county may charge a fee of $10 plus whatever it chooses to charge per exhibition from those auctioning goods for their personal profit in the unincorporated parts of the county. It may collect a $100 license fee from non-comedic and non-variety theaters and opera houses that do not sell liquor on their premises and are located within the county and in a city with a population of at least 20,000. Fees and charges for services Counties do not have evident authority to charge any noteworthy fees not already listed. California California Government Code: , 50026, 50030, to , 50402, 50474, 53717, to 53942, to 54711; California Health and Safety Code: 5471; California Public Utilities Code: to 99510; California Revenue and Tax Code: 205.5, 218, 224, 241, 7202, 7203, , , , , 7280 to 7283, 7284 to , 7287, , 9501, to 11911, 21005, 38101, 38115, ; Constitution of California: Article 13 Sections 1, 2, 3, 4, 8, 8.5, 18, 21, 22, 25, 29; Article 13A Sections 1, 2, 4 California requires appraisal of property at its fair market value before the property s assessment unless some other system of valuation is specified. The largest exception is that any property appraised during the tax year may maintain that year s appraised value indefinitely as long as ownership does not change and there is no new construction on the property other than required maintenance. Each year all property is assessed at the same rate before taxation. No ad valorem tax on property may exceed the rate of 1% of the property s assessed value, and the assessed value of a property cannot increase by more than 2% per year as an adjustment for inflation. However, these limits do not apply to taxes approved by voters either to finance a government s bonded indebtedness or to support the general purposes of an educational district or board. Special districts A county may levy one or more of several types of districtspecific property taxes dedicated to local improvements such as drainage, flood control, street lighting, and maintenance of roads. A tax may be levied in proportion to how much each property benefits from such improvements. A county may propose various other taxes within districts that are subject to approval by a twothirds majority of qualified voters in an election. However, these special levies may not have the effect of producing new taxes on A Look at County Revenue Authority, a State by State Report 7

11 real property. In general, revenue collected from real and personal property taxes may not exceed 25% of the aggregate expenditures of local governments in the state. To help prevent confusion about the responsibilities of individuals with respect to the payment of taxes, the State mandates the operation of a taxpayer education and information program. The state seeks to promote the preservation of historical lands and open space lands, which includes undeveloped or agricultural lands as well as any land that possesses scenic beauty, a capacity for recreational use, or natural resources. Therefore, any of this land that is subject to government restriction due to these attributes is also subject to property tax assessments that reflect such restricted usage. Personal property tax Unless specifically prohibited, a county may levy taxes on all personal property, tangible and intangible. However, the rate of taxation on intangible property may not be higher than 0.4% of its full value. Overall, revenues collected from personal property taxes may not exceed revenues collected from real property taxes in the same jurisdiction. A county may levy a general sales and use tax not to exceed 2% of gross receipts. This tax (or similar taxes called transaction and use taxes) may apply countywide or in special districts in a similar fashion to taxes on real property. For example, county supervisors have the authority to create a local public finance authority to fund drug abuse prevention, crime prevention, health care services, or public education using revenues from an increase in transaction taxes. While cities also have the authority to impose sales taxes, counties and cities may not impose sales taxes that would have the effect of doubletaxing individuals within both jurisdictions. State allocations and interlocal revenue distribution The state authorizes sharing of sales tax revenues between cities and counties, but it is not required. However, the state itself does allocate the revenues from a percentage point of its sales tax to counties, some of which is designated for transportation and the rest of which is available for general use. A county may impose a fee for the use of electricity, gas, water, sewer, telegraph, telephone, and cable television services within its unincorporated areas. Implementation of these fees may require voter approval in the event that such a legal requirement exists for the levy of new taxes in general. Motor fuel A county may levy taxes on motor fuel not used in aviation, or natural gas at a rate in increments of $0.01 per gallon of fuel or per 100 cubic feet of natural gas. A county s governing body may also propose the creation of a special district for the taxation of the same fuels at a set rate of $0.01 per gallon or per 100 cubic feet of natural gas. In the event of such a proposal, voters must approve the proposal in a special election in order for it to take effect. Occupancy A county may levy a tax on the rental of transient lodging, excluding campsites in state parks. Graffiti prevention tax If two-thirds of qualified electors voting on such an ordinance approve it, a county may issue an ordinance taxing the sale of marking instruments at the rate of $0.10 per aerosol paint container and $0.05 per felt tip marker or similar instrument. Pleasure riding tax A county may tax individuals who ride animals such as horses or mules in public areas designated for such a purpose at a rate of up to $10 per animal per year. Real estate tax A county may levy a tax on the transfer of real estate at a rate of $0.55 for every $500 of value. Timber tax Each county receives a portion of the revenues from a state tax on the immediate harvest value of timber. A county receives revenues from this tax partly in proportion to the amount of timber harvested within the county. Businesses / occupations A county may levy a license tax on any lawful private business within the county for regulation purposes and the generation of revenues. A county may charge fees in order to offset the costs of providing county land dedicated to park, amusement, or recreational purposes; improvements in or maintenance of airports; sanitation, storm drainage, or sewerage; and permits for the maintenance of equipment used in telephone connectivity. 8 A Look at County Revenue Authority, a State by State Report

12 Colorado Colorado Revised Statutes Annotated: , , , to , , , , , , , , , , , , , , , , , , , , , to , , , , , , , , , ; Colorado Constitution: Article 10 Sections 3, 20; Article 14 Section 18 Colorado requires appraisal of property every two years at its actual value before the property s assessment. The law designates three approaches to determining actual value: the cost approach, the market approach and the income approach. All property is assessed at 29% of its appraised value if no specific provision exempts it from this rate. While there is provision in state law for real residential property to be assessed at a rate of 21%, a constitutional amendment passed in the 1980 s froze the ratio of aggregate assessed value of real commercial property to that of real residential property in the state at the time. Therefore, as residential property value in the state has increased, legislators have been forced to reevaluate the rate of assessment of real residential property every two years in order to maintain the constitutionally mandated ratio of assessed values. Taxes are levied against the assessed value of property, and in any given tax year the revenues generated may not exceed 105.5% of the previous year s revenues added to the amount of tax revenues that the county refunded in the previous year once income from taxes on property not previously included in assessment rolls has been subtracted. As a buffer against increased taxes statewide, Colorado has a Taxpayer Bill of Rights that includes provisions for advance voter approval through elections of any new tax, tax rate increase, mill levy above that for the prior year, increase in the assessment rate of any property classification, extension of an expiring tax, or change in tax policy that would directly result in an increase in tax revenues for any district. Special districts Home rule counties may set up special districts in which fees and ad valorem taxes are levied to pay for local improvements, but these taxes are still subject to the above limits unless counties have even more restrictive limits to taxation as part of their own law. Any county may establish such a district in which it levies a tax of no more than 5 mills toward the control of noxious weeds, should qualified voters approve such a district. Classification Assessed value Residential Environmental conservation or agricultural Utilities Producing mines 7.98% of actual value as determined by the market or cost approach 29% of actual value as determined using the income approach with a capitalization rate of 13% 29% of actual value as determined using a combination of all three approaches Equal to 25% of gross proceeds or 100% of net proceeds, whichever is higher A county may not levy taxes on intangible personal property. As a subset of general ad valorem taxation outlined above, taxes on tangible personal property are levied after such property is assessed at 29% of its actual value. A county may levy general sales and use taxes. The sum of all state and local sales and use taxes may never carry a rate exceeding 6.9% in one jurisdiction, but this limitation may not preclude a county from having a sales tax with a maximum of 1%. Also, this limitation does not apply to a diverse set of special taxes that each county has the authority to levy, including taxes for the acquisition and maintenance of parks and open spaces and occupancy taxes, to name a couple. Special purpose local option taxes A county outside the regional transportation district may levy a sales tax, a use tax, or both at rates of 0.5% each for the purpose of construction and maintenance of mass transportation systems as long as each tax receives the approval of a majority of qualified voters in an election. Also subject to such elections are optional sales and use taxes for the purposes of managing water rights (a maximum levy rate of 1%), health care services, and mental health care services (a maximum levy rate of 0.25%). All these taxes are exempt from the cap on combined sales taxes in any given jurisdiction, but the possibility that they will exceed the normal limitation should be publicly announced in the ballot question in the election. A home rule county may contract to private individuals or corporations the right to provide water services and cable television to residents in exchange for fees agreed upon between the contracting parties. A Look at County Revenue Authority, a State by State Report 9

13 Alcohol Hotels, restaurants, and all other vendors of beer, wine, and liquor must pay various license fees to the county in which they conduct business. Occupancy A county may levy a tax on the rental of transient lodging at a rate not to exceed 2% of the rental price. The county must dedicate all the revenues from this tax to a county tourism fund that may not be used for capital expenditures with the exception of tourist information centers. Tobacco Each county receives a portion of the revenues collected from a state cigarette tax. Motor vehicle tax In addition to state registration fees, owners of automobiles must pay a $1.50 registration fee dedicated to county use for construction and maintenance of roads. Severance taxes Each county receives a portion of the revenues from state severance taxes on the extraction of minerals and mineral fuels. Counties do not have evident authority to levy any noteworthy license taxes not already listed. Public safety With voter approval, a county may levy a fee to offset operational costs of local public safety services, including any public agency dedicated to ensuring public safety, public health, or successful emergency management. Sanitation With voter approval, a county may impose a tax for the construction and operation of a solid waste disposal site. Connecticut Connecticut has no county governments. Delaware Delaware Code Annotated: Title 9 Sections 101, 8002, 3302, 4618, 5402, 6513, 8002, 8102, 8103, 8105, 8132, 8156; Title 30 Section 6102; Delaware Constitution: Article 8 Sections 1, 7 After its most recent assessments of property, each of the three counties in Delaware must fix its own tax rates yearly at levels that apply uniformly within any given classification of assessed value within its jurisdiction. These tax rates do not include special assessments or taxes levied for special benefits within local districts. No county may levy a tax rate that would produce an increase in revenues from the last tax year of more than 15%. Also, Kent County in particular may not levy a tax rate of more than 50 cents per $100 of assessed value. As a measure of accountability in each tax cycle, all three counties must calculate a rolled-back rate by determining what tax rate in the current year would have produced the same amount of revenue collected in the prior year. Then, each county must publish a notice in a widely-read newspaper announcing the amount of the increase in the tax rate from the rolled-back rate from the prior year. Special districts Although counties do not have sweeping powers to set up special taxing districts, they do have some authority: for example, New Castle County may set up a special development district, while Kent County and Sussex County may create sewer and water districts to pay for such services. The appraised value of property that has been adequately dedicated to agricultural or forest uses is determined according to the value of those uses. Neither Delaware nor any of its counties levies a sales tax. Counties do not have the authority to levy franchise taxes or fees. Occupancy Each county receives a portion of the revenues from a state occupancy tax to be dedicated exclusively to the county s convention and visitors bureau. 10 A Look at County Revenue Authority, a State by State Report

14 Capitation tax Every citizen 21 years of age or older must pay a capitation tax annually in Kent County and in Sussex County. In Kent County, the tax may be no greater than $5, while in Sussex County the tax may range from $3 to $10. Real estate tax A county may levy a tax on the transfer of real estate within unincorporated parts of the county at a rate no greater than 1.5% of the value of the property. This tax does not apply to first-time home buyers, and all the proceeds of the tax are to be dedicated to public safety, economic development, debt reduction, or capital or infrastructure projects or improvements. Counties do not have evident authority to levy any noteworthy license taxes not already listed. Counties do not have evident authority to charge any noteworthy fees not already listed. Florida Constitution of the State of Florida: Article 7 Sections 1, 2, 3, 4, 6, 9; Florida Annotated Statutes: , , , , , , , , , , , , , , , to , , , , , to , , , , , , , , , , , , to , , , , , , , , , , , , , to , Florida requires yearly appraisal and assessment of property at its just value, which is determined by a number of factors including market price, cost of replacement, production of income, and legal regulations on the property s usage. In the course of a year, no property s assessed value may increase by more than 3% or the rate of inflation as measured by the Consumer Price Index (CPI), whichever is lesser. Each county may levy a tax with a uniform rate on real property and tangible personal property within its jurisdiction. The rate of such a tax may be no greater than 10 mills, excepting taxes approved by voters and any additional tax with a rate of 10 mills or less that is levied through a municipal service taxing unit to defray the costs of county services. Special districts A county may establish municipal service taxing units that charge special assessments in unincorporated parts of their jurisdictions in order to fund programs such as fire protection, law enforcement, beach erosion control, water treatment, street maintenance, sewage treatment, transportation, various health care services, and others. Classification Assessed value Agricultural Environmental conservation Based only on its agricultural use, which is valued using five-year average income Generally determined according to the present use of the land A county may tax tangible personal property at the same rate that it taxes real property. Notable exceptions include motor vehicles, mobile homes, airplanes, boats, trailers, or trailer coaches. Intangible personal property is exempt from county property taxation even though the State may tax it. Special purpose local option taxes Counties do not have broad authority to levy sales or use taxes, but they do have the discretion to impose specific taxes for purposes defined in state law. Generally, in order for these local option taxes to come into effect, two conditions must be met: voters must approve them on a special ballot, and the combined rate of the taxes usually may not exceed 1%. A list of most of the special purposes and the allowable taxes for such purposes includes: Project funded by optional sales tax Capital improvements in infrastructure General public purposes in small counties Indigent care and trauma centers County public hospitals School capital improvements Rate of tax / county eligibility 0.5% or 1%, available to any county 0.5% or 1%, available to counties with a population of 50,000 or less Up to 0.5% (or up to 1% if the county has a publicly supported medical school), available to unconsolidated counties if the population is greater than 800,000, the county must not also be levying sales taxes for public hospitals 0.5%, available to any county Up to 0.5%, available to school boards in any county A Look at County Revenue Authority, a State by State Report 11