ADVALOREMTAXINMISSISSIPPI

Presentedby

JoeYoungStennisIns3tuteofGovernment

DEFINE“ADVALOREM”

•  ThephraseadvaloremisLa3nfor“accordingtovalue”

ROLEOFGOVERNINGAUTHORITY

Theyshallhavethepowertolevysuchtaxesasmaybenecessarytomeetthedemandsoftheirrespec3vemunicipality...notexceedingthelimitsthatmaybeprescribedbylaw....

§§27-39-307and21-33-45oftheMississippiCodeof1972

ADVALOREMTAXSPENDING

.

WHATISTAXED?

• 10%-ClassI–SingleFamilyOwnerOccupiedResidenFal

• 15%-ClassII–AllRealPropertynotclassifiedClassI

• 15%-ClassIII–BusinessPersonalProperty

• 30%-ClassIV–PublicUFliFes

• 30%-ClassV–MotorVehicles

WHATISTRUEVALUE?

Truevalueshallmeanandinclude,butshallnotbelimitedto,marketvalue,cash value, actual cash value, property value and value for the purposes ofappraisalforadvaloremtaxa3on....InarrivingatthetruevalueofallClassIand Class II property and improvements, the appraisal shall be madeaccordingtocurrentuse,regardlessofloca1on. Inarrivingatthetruevalueof any land used for agricultural purposes, the appraisal shall be madeaccording to its useon January 1 of each year, regardless of its loca3on; inmakingtheappraisal,theassessorshallusesoiltypes,produc3vityandothercriteria....

Truevalueisdefinedin§27-35-50oftheCode:

WHATISTRUEVALUE?(cont.)

•  Thepointhereisthattruevalueandmarketvaluearenotthesame.Agriculturalvalues,forexample,canbemuchlessthantheactualmarketvalueoftheproperty.

•  OwnershipandassessmentofrealpropertyisasofJanuary1stofthetaxyearandpayablethenextyear

•  Example:Taxable:January1,2016

Payable:December26,2016February1,2017

WHATISASSESSEDVALUE?

•  Thetruevalueismul3pliedbyara3othatissetbystatelawtoyieldtheassessedvalue.Thera3osareasfollows:

ClassI 10%

ClassII 15% ClassIII 15%

ClassIV 30%

ClassV 30%

WHATISASSESSEDVALUE?(con’t)

•  Itisnecessarytounderstandthedifferenceinmarketvalue,truevalue,andassessedvalue.Assessedvalueisusedtodetermineeverythingfrommillageratestosalarylevelsforsomecountyofficials,includingthatofsupervisors.

HOWARETHEDIFFERENTCLASSESTAXED?

•  BasicFormula

! TrueValuex%(Ra3osetbylaw)

AssessedValue

xMillageRate

GrossTaxes

WHATISA“MILL”ANDHOWISITCALCULATED?

• AMillisaunitusedincalcula3ngmoneybutisnotacoin.

• AMillisatenthofapennyorathousandthofadollar.

• Atenthofonedollaroradimeiswrijen$.10.

• Ahundredthofonedollarorapennyiswrijen$.01.

• Onemillisathousandthofonedollarandiswrijen$.001.

Example:

AClassIIpropertyhasatruevalueof$75,000andisinataxingdistrictinwhichthetaxlevyis117.72mills.Calculatethetaxbill.

117.72Mills=.11772

TrueValue- $75,000ClassIIRa3o- x.15AssessedValue- $11,250MillRate- x.11772TaxBill- $1,324.35

“SOMECITY”ASSESSEDVALUE

GROSS EXEMPT NET

ASSESSEDVALUE

SPECIALHOMESTEAD

ASSESSEDVALUE

REAL 77,624,832 13,426,719 64,198,113 46.8%

PERSONAL 19,713,578 19,713,578 14.4%

MOTORVEHICLE 35,237,311 35,237,311 25.7%

PUBLICUTILITY 15,250,169 15,250,169 11.1%

MOBILEHOMES 2,855,269 2,855,269 2.1%

---------------------------- -------------------------

TOTAL 150,681,159 137,254,440

AssessedValuexMillage=Budget

Therefore:

Millage=

Budget/AssessedValue

AssumeBudget=$4,000,000

$4,000,000 (BUDGET) Millage= ------------ $137,254,440(ASSESSEDVALUE) Millage=.0291or29.1Mills

SpecialHomesteadExemp3on

Homesteadexemp3onforci3esinvolvesonlythoseapplicantsthatqualifyfor"SpecialHomesteadExemp3on".Thatistheapplicantsmustbeover65yearsofageordisabled.Theapplicantsaretaxexempton$7,500of"assessedvalue".TheStateofMississippireimbursesthecityaflat$200perapplicant.

Inrecentyearsthestatehasnotreimbursedtheci=esallofthe$200becauseofbudgetcuts

REGULARHOMESTEAD$7,500TABLEASSESSEDVALUE ASSESSEDVALUE

OFHOMESTEAD CREDITAMOUNT OFHOMESTEADCREDITAMOUNT

$1 $150 $6.00 $3,751 $3,900 $156.00$151 $300 $12.00 $3,901 $4,050 $162.00$301 $450 $18.00 $4,051 $4,200 $168.00$451 $600 $24.00 $4,201 $4,350 $174.00$601 $750 $30.00 $4,351 $4,500 $180.00$751 $900 $36.00 $4,501 $4,650 $186.00$901 $1,050 $42.00 $4,651 $4,800 $192.00$1,051 $1,200 $48.00 $4,801 $4,950 $198.00$1,201 $1,350 $54.00 $4,951 $5,100 $204.00$1,351 $1,500 $60.00 $5,101 $5,250 $210.00$1,501 $1,650 $66.00 $5,251 $5,400 $216.00$1,651 $1,800 $72.00 $5,401 $5,550 $222.00$1,801 $1,950 $78.00 $5,551 $5,700 $228.00$1,951 $2,100 $84.00 $5,701 $5,850 $234.00$2,101 $2,250 $90.00 $5,851 $6,000 $240.00$2,251 $2,400 $96.00 $6,001 $6,150 $246.00$2,401 $2,550 $102.00 $6,151 $6,300 $252.00$2,551 $2,700 $108.00 $6,301 $6,450 $258.00$2,701 $2,850 $114.00 $6,451 $6,600 $264.00$2,851 $3,000 $120.00 $6,601 $6,750 $270.00$3,001 $3,150 $126.00 $6,751 $6,900 $276.00$3,151 $3,300 $132.00 $6,901 $7,050 $282.00$3,301 $3,450 $138.00 $7,051 $7,200 $288.00$3,451 $3,600 $144.00 $7,201 $7,350 $294.00$3,601 $3,750 $150.00 $7,351 $7,500 $300.00

Example1

ALLCLASSIRESIDENTSWITHREGULARHOMESTEADEXEMPTION

COUNTYMILLS 59.48 $100,000 TRUEVALUE

CITYMILLS 34.37 X 10% ASSESSMENTRATIO

SCHOOLMILLS 48.29 _______________

$10,000 ASSESSEDVALUE

$10,000 ASSESSEDVALUE

TOTALMILLS142.14

X 0.14214

_______________

$1,421.40 GROSSTAX

$1,421.40 GROSSTAX

-$300.00 REGULARHOMESTEADCREDIT

$1,121.40 NETTAXDUE

Example2

ALLCLASSIRESIDENTSWITHSPECIALHOMESTEADEXEMPTION

COUNTYMILLS 59.48 $100,000 TRUEVALUECITYMILLS 34.37 X 10% ASSESSMENTRATIOSCHOOLMILLS 48.29 ______________

$10,000 ASSESSEDVALUE- 7500 SPECIALHOMESTEADCREDIT______________$2,500 NETASSESSEDVALUE

TOTALMILLS 142.14 X 0.14214______________$355.35 NETTAXDUE

Example3

ALLCLASSIIRESIDENTSWITHNOHOMESTEADEXEMPTION

COUNTYMILLS 59.48 $100,000 TRUEVALUECITYMILLS 34.37 X 15% ASSESSMENTRATIOSCHOOLMILLS 48.29 ______________

$15,000 ASSESSEDVALUE

$15,000 ASSESSEDVALUETOTALMILLS 142.14 X 0.14214

______________$2,132.10 GROSSTAX

WhatisaTaxExemp3on?

AssumeBudget=$4,000,000

$4,000,000 (BUDGET) Millage= ------------ $137,254,440(ASSESSEDVALUE)

Millage=.0291or29.1Mills

Assume Budget = $4,000,000

$4,000,000 (BUDGET) Millage = ------------ $100,000,000 (ASSESSED VALUE)

Millage = .040 or 40 Mills

AVERAGEMILLAGERATESINMS

RURALRESIDENT CITYRESIDENT

COUNTYLEVIES 66.73 56.66

K-12SCHOOLLEVIES 51.91 51.91

COMMUNITYCOLLEGELEVIES 3.47 3.47

MUNICIPALLEVIES 37.03

TOTALMILLRATE 122.11 149.07

DISCLAIMER:Theinforma3onprovidedaboveisacompila3onofdatafromnumerousoutsidesources.Assuch,thisdatacan

datacanonlybewarrantedtotheextentofthecorrectnessofitssourcedocuments.MSDEPTOFREV

• BREAKDOWNOFTHEADVALOREMTAXBURDEN

•  NOTE:ALLDATAWASOBTAINEDFROMTHEDORANNUALREPORTANDISASSUMEDTOBEACCURATE

TOTALSTATEWIDEASSESSEDVALUEIN2016

FY2016 TOTALASSESSEDVALUE %OFTAXBURDENCLASSI(SINGLEFAMILYOWNEROCCUPIEDRESIDENTIALREALPROPERTY) $7,086,778,972 24%

CLASSII(ALLREALPROPERTYNOTCLASSI) $10,107,581,271 34%CLASSIII(BUSINESSPERSONALPROPERTYINCLUDINGMOBILEHOMES) $5,372,717,849 18%

CLASSIV(PUBLICUTILITYPROPERTY) $3,162,634,317 11%

CLASSV(MOTORVEHICLES) $3,776,810,715 13%

TOTAL $29,506,523,124 100%

DATAPROVIDEDBYJEFFFORMAN(MSDEPTOFREVENUE)

Formoreinforma3on

JoeYoungyoung@sig.msstate.eduCell-601.248.7809