Property Tax Post: Turkey Day, Toll Roads, and Taxes


thanksgiving traffic

Approximately 54.3 million people will be traveling for the upcoming Thanksgiving holiday, and nearly 90 percent are using cars, according to The Washington Post. Drivers will be taking to the highways, but also toll roads and turnpikes in hopes to ease congestion or reduce travel time. Toll roads have become a popular way for localities to pay for construction of major thoroughfares with little to no federal funding, while also increasing funding for existing infrastructure projects. However, because these roads take up large amounts of land, property tax revenue can be significantly impacted in areas with toll roads, as public roads are often exempt from state property taxes.

For example, in New Jersey, property owned by the state, counties, or municipalities is exempt, except for property held for future development of highways. Likewise, in Illinois, all state, county, and municipal property is exempt from property taxes. This exemption extends to toll roads that are state-owned. State-owned toll roads that are leased to an entity that does not qualify for exemption are still exempt.

In Indiana, even tangible personal property used in connection with a public-private toll road project can be exempt from property taxes. Arizona, on the other hand, assesses private toll roads in the same way as real property, but at a per-mile rate for the portion that lies in each county. Additionally, Arizona toll road property is assessed together with any improvements on the land, such as the road itself, or any tollbooth structures.

No matter how you make the trek to celebrate with family or friends, chances are you will encounter tax-exempt property. And if you travel on I-95, let’s hope the trip takes less than the 62 years it took to construct it.

Continue the discussion on Bloomberg Tax’s State Tax Group on LinkedIn: Does your state have tax-exempt toll roads?

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