Many states using a form of modified fair market value in their property tax calculations have enacted property tax cap laws, Bloomberg BNA State Tax Law Editor Michael Kerman writes in this week’s issue of the Weekly State Tax Report.
Such measures are meant to ensure that homeowners can afford the higher taxes that come with increases in property values, he explains. But, these caps are not working as intended, Kerman says.
“While the caps do ensure that taxpayers experience small and steady increases in their property tax bills, they have in some states crippled municipal revenues and prevented properties' assessed values from returning to pre-recession levels after periods of declining value,” Kerman explains.
Kerman’s article, which can be read in its entirety here, takes a look at the states that have enacted caps, explains the issues that have arisen after the caps were implemented and suggests that states recently implementing or considering property tax caps learn from these states' experiences.
Continue the discussion on Bloomberg BNA’s State Tax group on LinkedIn: Has your state enacted property tax cap laws?
For more information about this and other state tax issues, sign up for a free trial of the Bloomberg BNA Premier State Tax Library.
In other developments…
Sutherland SALT Shaker: August 2014 Digest
New Study Finds New York Growth in Millionaires Slowest in the Nation, by the Tax Foundation
Compiled by Priya D. Nair
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