Assessment Year vs. Payable Year
June 2007
The usage of the terms “assessment year” and “payable year” has a tendency to cause confusion among some property owners. This lack of understanding is attributable to the fact that the property tax timeline usually spans a period of two years. In the first year, valuations and property tax classifications are established by the assessor plus budgets and levies are set by local and state taxing authorities. During the second year, the taxes for most properties are calculated by the county auditor and the tax statements are issued and payments collected by the county treasurer. Only mobile/manufactured homes considered to be personal property are assessed and taxed in the same year. As a result of taxes being paid annually, each assessment year is also a payable year.
Why is it necessary for property owners to understand that the terms “assessment year” and “payable year” have different meanings?
It is important that property owners recognize that there is a difference in the meaning of each of these terms in order to address both assessment and taxation issues in an accurate and timely manner. The information and data reported on the tax bills, notices of valuation and classification, and proposed property tax notices represent a snapshot in time. Payable year references are noted on the tax statements and the proposed property tax notices while assessment year references are recorded on the notices of valuation and classification, limiting their usefulness for comparative purposes to a particular year and requiring action, if desired, by property owners prior to established deadlines. In other words, the 2007 payable year taxes are based upon the values and tax classifications set during the 2006 assessment year. Any payable tax review and comparison to other properties should generally be restricted to the same payable year just as any evaluation of the value and/or tax classification should center on the same assessment year to ensure that all matters are viewed in the same context. Additionally, there are time limits set to allow for local, county, and tax court appeals as well as truth-in-taxation hearings in regard to matters connected to the assessment year and payable year.
What is meant by the label “assessment year”?
The assessment year is the 365 days beginning with the January 2nd assessment date. For all real and most personal property, except for mobile/manufactured homes, it is the year that forms the basis for taxation in the next or following year. The assessment year for mobile/manufactured homes treated as personal property is the same year that the taxes become due and payable. Property values and tax classifications are always set as of the assessment date. The valuations are based upon sales that occurred within a 12-month study period covering the months from October 1st of a given year through September 30th of the following year, ending three months before the January 2nd assessment date. Tax classifications are normally determined according to the use of the property on or before the January 2nd assessment date, except for cases involving the mid-year homestead and special agricultural homestead classifications.
Define the phrase “payable year”?
Taxes on real and personal property are defined in statute by payable year. They are always related to and designated by the year in which they actually become due and payable. Hence, the payable year is the year in which tax statements are issued and taxes are collected. The payable year taxes are calculated using the values and tax classifications established on the preceding January 2nd assessment date, except for mobile/manufactured homes that are assessed as of January 2nd and taxed on or before July 15th of the same year.
Occasionally, property tax administrators will use an expression like “2006 pay 2007”. What is the meaning of this technical language?
This description identifies the year that the property was assessed and the year that the taxes are due and payable. It means that the assessment laws, practices, and procedures in place during the 2006 assessment are applied and taxes are calculated and collected in 2007 according to these guidelines and standards.