Welcome to... Everything you always wanted to know about New Growth... But... were afraid to ASK !

Welcome to...Welcome to...“ “ Everything you always Everything you always wanted to wanted to

know about know about New Growth...New Growth...

But... But...

were afraid were afraid

to to ASK ! ASK ! ” ”

What is Allowable Tax Base What is Allowable Tax Base Growth?Growth?

Subject to Taxation for the first time- New articles of personal property- Previously exempt property

Taxed as a Separate Parcel for the first time- Subdivisions- Condo Conversions

Increase in Assessed Valuation over prior year due to construction activity - BUT NOT due to a Revaluation Program

Example of Allowable GrowthExample of Allowable Growth“Non-Revaluation Year”“Non-Revaluation Year”

Prior FY Value

L = 100,000

B = 150,000

$250,000

Current FY Value

L = 100,000

B = 200,000

$300,000

Allowable Growth Allowable Growth ==

$300,000 - $300,000 - 250,000 250,000

or $50,000or $50,000

Example of Allowable GrowthExample of Allowable Growth“Revaluation Year”“Revaluation Year”

Prior FY Value

L = 100,000

B = 150,000

$250,000

Adjusted ValueAdjusted Value = = Prior FY Parcel StatusPrior FY Parcel Status Valued byValued by Current FY Current FY Schedule and TablesSchedule and Tables

Adjusted Prior FY Value

L = 120,000

B = 180,000

$300,000

Example of Allowable GrowthExample of Allowable Growth“Revaluation Year”“Revaluation Year”

Adj Prior Value

L = 120,000

B = 180,000

$300,000

Current FY Value

L = 120,000

B = 240,000

$360,000

Allowable Growth Allowable Growth ==

$360,000 - $360,000 - 300,000 300,000

or $60,000or $60,000

Section 40, Chapter 653 of the Section 40, Chapter 653 of the Acts of 1989Acts of 1989

ALLOWABLEALLOWABLE

New Buildings

Additions

Buildings Removed

or Destroyed

NON-ALLOWABLENON-ALLOWABLE

Condo Conversions

Subdivided Land

Personal Property

Tax Exempt Returned

to Taxation

New Growth Form - LA13 TopNew Growth Form - LA13 TopPrior Year Values and AdjustmentsPrior Year Values and Adjustments

COMMONWEALTH OF MASSACHUSETTSDEPARTMENT OF REVENUE YOURTOWNDIVISION OF LOCAL SERVICES COMMUNITYBUREAU OF LOCAL ASSESSMENT

TAX BASE LEVY GROWTH FY200X - LA13Retain documentation for 5 years in the event of DOR audit

[A] [B] [C] [D] [E]PRIOR FY VALUES PRIOR FY OTHER

BY CLASS REV & OMIT ABATEMENT ADJUSTMENT PRIOR FY ADJPROPERTY CLASS (Committed / LA-4) No. VALUES No. VALUES No. VALUES VALUE BASE

RESIDENTIAL:

Single Family (101)

Condominium (102)

Two & Three Family (104 & 105)

Multi - Family (111 - 125)

Vacant Land ( 130 - 132 & 106)

All Others (103, 109, 012-018)

TOTAL RESIDENTIAL

OPEN SPACE

Commercial

Chapter 61, 61A, 61B

TOTAL COMMERCIAL

INDUSTRIAL

PERSONAL PROPERTY

TOTAL REAL & PERSONAL

Actual ( )LA-13 (1997) Pro Forma ( )

New Growth Form - LA13 TopNew Growth Form - LA13 TopPrior Year Values and AdjustmentsPrior Year Values and Adjustments

Prior Year LA4 assessed values are reported in Column A

Report Revised and Omitted values committed in Prior Year in Column B - do not include rollback taxes

In Column C, list only those Abatements that are also reflected in current year assessed values

Column D - Other Column D - Other AdjustmentsAdjustments

Same Value or Increase in Value:(-) old value from old class(+) old value to the new class

Changes between ClassesChanges between Classes

Class 130

Prior Value = $100,000

Class 101

Current Value = $250,000

Column D - Other Column D - Other AdjustmentsAdjustmentsChanges between ClassesChanges between Classes

Allowable Growth = $250,000 - 100,000 Allowable Growth = $250,000 - 100,000

or $150,000or $150,000




Decrease in Value:(-) old value from its old class(+) new value to current class


Class 130

Prior Value = $125,000

Class 61A

Current Discounted Value

= $15,000


Allowable Growth = $ 0Allowable Growth = $ 0


Going to Exempt:(-) old value from old class



Decrease in Value:(-) old value from its old class(+) new value to current class

Column D Changes Column D Changes Needed with Aggregate Needed with Aggregate

ReportingReportingPrior Year

Current Year

Growth

Value = $250,000

Value = $300,000

Value = $150,000

Value = $0 (Exempt)

= $ 50,000

= $ 0


ReportingReportingPrior Year

Total Taxable Value

= $ 400,000

Current Year

Total Taxable Value

= $ 300,000

But...

New Growth

is

$ 50,000

Not...

Current Value -

Prior Value

or

- $100,000


ReportingReporting

By not accounting for Column D By not accounting for Column D

changes, Growth is lost or offset !changes, Growth is lost or offset !

New Growth Form - LA13 BottomNew Growth Form - LA13 Bottom Current Year Reval Adjusments and Current Year Reval Adjusments and

GrowthGrowth

Column F - Revaluation or Column F - Revaluation or Interim Year AdjustmentsInterim Year Adjustments

Apply aggregate % change due to Revaluation or Interim Year Adjustment (derived by sampling) to Column E

- Do not include properties with changes in physical condition, taxable status or unit

- Sample 5% of property class or 20 parcels, whichever is greater

- Sample should be representative

Old Value New Value Ratio

My House 300,000 450,000 1.50Your House 200,000 250,000 1.25House on the Hill 9,500,000 9,500,000 1.00

Total Value 10,000,000 10,200,000

Average Ratio 1.25Median Ratio 1.25

Aggregate Ratio 1.02

Calculating the Reval Factor in Calculating the Reval Factor in the “Three House Town”the “Three House Town”

There is no “New Growth” in this town. The only change in value is due to the revaluation of properties.

Aggregate Percent Change Aggregate Percent Change as applied to New Growth Form as applied to New Growth Form

(LA13)(LA13)

Tax Base Levy Growth Col EAdj Value

Base

Residential Total 10,000,000

Col F Col F Col G Col H

Reval %Reval Adj

ValueTotal Adj

Value BaseProposed

Value

0.02000 200,000 10,200,000 10,200,000



If actual value or % changes are known by generating a series of LA-4 reports, record percent (%) changes in Column F

““Comparison of LA4s” MethodComparison of LA4s” Method

Original

Property Value

= $300,000

New Addition

= $100,000+

Total Property Value

before

Revaluation Adjustment

= $400,000

Entering Building Permits before Revaluation Changes


Adjusted

Property Value

= $360,000

Adjusted

New Addition

= $120,000

+

After Entering Revaluation Increase of 20%

Total Property Value

after

Revaluation Adjustment

= $480,000


To Compute Reval % Change in Column F

Divide…

by…

LA4 Value with Building Permits

After Reval Changes

480,000

400,000= 20% Increase

For Example:

LA4 Value with Building Permits

Before Reval Changes


DO NOT

Subtract…

To Compute Reval $ Change in Column F

Multiply…Reval % by Column E

LA4 Value

Before Reval

minus

LA4 Value

After Reval

Because…This calculates New Growth

using Prior Tables or Schedules!!

480,000 - 400,000 = 80,000For Example:


Using incorrect Reval $ Adjustment …

Using correct Reval % Adjustment…



If actual value or % changes are known by generating a series of LA-4 reports, record percent (%) changes in Column F

If actual growth is known by parcel listing (Column I), work backwards to compute Column F values and %

Determining New Growth and Determining New Growth and Levy Limit IncreaseLevy Limit Increase

Total Adjusted Value Base from Prior Year is calculated in Column G by adding Columns E and F

Proposed Values in Column H are taken from the Current Year LA4

New Growth Valuation in Column I is calculated by subtracting the Prior Year Adjusted Values from Current Year Proposed Values (Col H - Col G) -

EXCEPT FOR PERSONAL PROPERTY GROWTHEXCEPT FOR PERSONAL PROPERTY GROWTH

Personal Property GrowthPersonal Property Growth

New Items on Existing Accounts

Utility Values - Locally Assessed and DOR Assessed Telephone and Pipelines

Do Not use the difference in value from year to year - YOU MAY LOSE GROWTH

New Accounts

Amended New Growth - LA13AAmended New Growth - LA13A

Amended New Growth - LA13AAmended New Growth - LA13A

Only one report can be submitted each Fiscal Year- Submit before setting of Tax Rate for next fiscal

year- Report allowable growth inadvertently omitted

Consists of “Omitted or Revised Assessments” that result in increase in assessed value of parcel or personal property item over prior year

Filling in the LA13A Form requires:- Reporting by Class totals- Using Prior Year’s Tax Rate

Values in Column B do not correspond to Omitted and Revised Assessment Report or include roll back taxes

Common Errors on the LA-Common Errors on the LA-1313

Column C (Abatements) lists tax dollars instead of valuation dollars

Negative values in Columns B or C

Column D is blank or improper adjustments are made

Reval adjustment Column F incorrectly calculated

Personal Property growth is too low or not reported

Negative growth in Column I for a major class

Either (+) or (-) signs used incorrectly

Common sense checks skipped

(Type on City/Town Letterhead)

(mail to:) Bureau of Local AssessmentDivision of Local Services

P.O. Box 55490Boston, MA 02205-5490

OMITTED AND REVISED ASSESSMENT REPORT FOR FISCAL YEAR ____

_________________________________(City/Town)

In accordance with the provisions of General Laws Chapter 59, §75, the Board ofAssessors submits the following report on the omitted and revised assessments madefor fiscal year ___.

Total Additional Taxes Committed

OMITTED ASSESSMENTS $

REVISED ASSESSMENTS

TOTAL:

The assessors also committed the following rollback taxes during the fiscal year.

CH. 61A ROLLBACK TAXES

CH. 61B ROLLBACK TAXES

TOTAL:

A copy of all commitments made for omitted and revised assessments and rollbacktaxes for the year is attached.

Assessment Classification Report - Assessment Classification Report - LA4LA4

DORDOR Review Process of Review Process of LA-4LA-4

All parcel counts and assessed values are reported for each property type - including zero (0) values

Name of community generates values for 505 and 506 classes which can be changed for those communities that have adopted the “personal property exemption”

Exempt value reported

Tax Recap Program Requirements


Comparison of assessed values and parcel counts for each property type, from previous to current year


Chapter land classes (600s, 700s, 800s) - report discounted land values only


DOR valued utilities (505,506) and locally assessed utilities (504) certified in revaluation year

M ay 1 5, 20 03

T o: T he Boa rd of A sse ssorsF rom : M a rilyn H . Brow ne, C hief, B ure au o f Loca l A sse ss m entR e: C E RT IF IE D TE LE PH ON E & T EL EGR AP H VA L UA T ION S FO R FIS CA LY EA R 2004

In com plian ce w ith provis ions of G e neral L aw s C hapter 5 9 §39, th e C om m iss ionerof R evenu e ha s determ ined and does he reb y certify the full and fa ir cas h va luationas January 1, 2 003 of the m a chinery, poles , w ire s and undergro und c onduits, w iresa nd pipe s of the telephone an d tele grap h com p anies . A pp eal of the valuations m u stbe m ade to the Appe llate Tax B oard by th e property ow ner or the boa rd of as se ssorson o r before J une 15, 2003.

S ee enclosed telephone com p any addresse s for com plete com pa ny nam e s anda ddress es . Q ue stions regarding thes e va luations m ay be direc ted to W a lter S an dovalD usz a a t (617) 626-4087.

F Y2004 T e leph on e & T e legraphPerson a lty

Usage C lass 505

Po les, W ir es &Ci ty/Town Com pany Condu it s, P ipes Mach inery To talDa na Bell At lant ic M obile $0 $2,157 ,4 00 $2,157 ,4 00Da na V eriz on New E ng la nd $1,802 ,6 00 $158 ,4 00 $1,961 ,0 00

Dan a To tal $1,802 ,6 00 $2,315 ,8 00 $4,118 ,4 00

M ass ac hus etts De partm e nt of R eve nue Division of Local Se rvicesAla n Le Bovidge, Commis s ioner Ge ra rd D. P erry, Acting De puty Commis s ioner

DORDOR Review Process of Review Process of LA-4LA-4 Submission of Interim Year Adjustment Form now

required for all non-certification communities


SummarySummary Comparison of assessed values and parcel

counts for each property type, from previous to current year

Chapter land classes (600s, 700s, 800s) - report discounted land values only

DOR valued utilities (505,506) and locally assessed utilities (504) certified in revaluation year

Submission of Interim Year Adjustment Form for all non-certification communities

DOR Review Process of LA-13DOR Review Process of LA-13 Total growth compared to community’s three-

year average Individual major classes - residential, commercial,

industrial, and personal property - also compared to three-year average

DOR Review Process of LA-13DOR Review Process of LA-13 Estimated growth due to construction of new

homes (101’s)

DOR Review Process of LA-13DOR Review Process of LA-13 Analysis of previous year’s LA-13s for entire state

determines normal % ranges for:- Entries in columns B,C,D

Pleasantville New Growth Edits

Column B Rev & Omit

Column C Abatements

Column D Adjustments

Residential 500,000 1,250,000 -1,500,000

% of Column A Residential Value 0.08% 0.19% -0.23%

Commercial 0 3,000,000 500,000

% of Column A Commercial Value 0.00% 3.33% 0.56%

Industrial 150,000 100,000 -300,000

% of Column A Industrial Value 0.67% 0.44% -1.33%

• Suburban - Low range - 115%

• Large Urban - High range - 135%

• Economic Center - Mid range - 120%

• Resort - High range - 130%


determines normal % ranges for:• Growth according to type of community:

• Rural Residential - Mid range - 120%

• Small Urban - Mid range - 125%

• Suburban - Low range - 115%

• Large Urban - High range - 135%

• Economic Center - Mid range - 120%

• Resort - High range - 130%


determines normal % ranges for:• Growth according to type of community:

• Rural Residential - Mid range - 120%

• Small Urban - Mid range - 125%


determines normal % ranges for new growth as a % of the community’s total value:

• Large Urban 1.80%

• Small Urban 1.90%

• Suburban 2.25%

• Rural Residential 2.10%

• Resort 1.95%

• Economic Center 2.00%

DOR Review Process of LA-13 DOR Review Process of LA-13 SummarySummary

Total Growth compared to community’s 3 Year Average

Individual major classes compared to 3 Year Average

Estimated Growth due to construction of new homes

Analysis of previous LA-13s determine normal ranges:- Entries in columns B,C,D- Growth according to type of community: Large and

Small Urban, Suburban, Rural Residential, Economic Center and Resort

- New growth as a % of the community’s total value

Reporting Requirements and Reporting Requirements and ProceduresProcedures

Finalize Assessments • Non Certification Year - submit LA4 and

Interim Year Adjustment Report with LA13 New Growth Report to BLA via the “Automated Recap” program

• Certification Year - Final Certification must be granted before New Growth can be approved

Submit New Growth (LA13) and Amended Growth for prior year (LA-13A) for approval by BLA via the “Automated Recap” program

Bureau of Accounts increases the Levy Limit accordingly and approves the Tax Rate

This This Concludes ...Concludes ...

The Workshop on The Workshop on

““The Infamous LA13The Infamous LA13” and ” and Automated Automated

RecapRecap

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Welcome to... Everything you always wanted to know about New Growth... But... were afraid to ASK !