Minnesota

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State of Minnesota Property Taxes


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State Tax Summary
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In the state of Minnesota, real property tax is called Property Tax. The official valuation standard is the market value or “the usual selling price at the place where the property to which the term is applied shall be at the time of assessment; being the price which would be obtained at a private sale or an auction sale, if it’s determined by the assessor, that the price from the action sale represents an arm’s length transaction, the price obtained at a forced sale shall not be considered.” Chapters 270-275 Minnesota Statutes, as amended. Minnesota has two property tax refund programs for homeowners. A taxpayer may qualify for both. One is income based and one is for property taxes that exceeded 12% increase from 2007 to 2008. Minnesota has one property tax income based refund program for renters. Minnesota has two appeal procedures: a one step appeal process and a four-step appeal process. The Chicago Area Service Center (ASC) provides tax service for Minnesota.

Responsible agency

Property Tax Calendar

Assessment date

January 2

Valuation Notices

Notices are sent annually in March and April

Appeal Deadline

Local Boards of Review convene on April 1st; State Board of Equalization convenes on April 15; last day to *file a petition in the District Court or Tax court is May 15; Applications for the first appeal are made to local boards of review during April and May.

Bill Payment Date

Semiannual due May 15 and October 15; installments must be paid in equal amounts.

Property tax rates and dates

Contents

Annual assessment of real property

Yes

Classification of property

All assessed at 100%

Collections

Taxes are collected one year in arrears

Fiscal year

January 1 through December 31

Level of collection

County treasurer

Level of government responsible for assessment

Commissioner of Department of Revenue, county, municipality, city

Reassessment cycle

Every 4 years or less

Tax Calculation Rate

(Up to $75,000 Market Value x 1%) + (Amount over $75,000 x 1.85%) X Tax Capacity Rate (varies by jurisdiction) = Tax Amount

Residential Exemptions

Exemption claims must be filed to receive exemption from specially treated property or for property tax refunds.

Disaster relief

Current year property taxes may be reduced when the homestead is destroyed or damaged by storms, floods, earthquakes, tornadoes, explosions, fire, landslide or any catastrophe that results in a local emergency declaration.

Homestead Income based Property Tax Refund

Homeowners may be eligible for an income-based refund. The larger the tax is compared to income, the larger the refund. Renters must have a total household income of less than $35,000 to be eligible for a regular property tax refund. A homeowner must own and live in their home on January 2 of the current tax year. The Homeowner must have been a full time or part time resident of Minnesota and must have a total household income of less than $60,000.

Homestead non income based Special Refund Program

An application may be approved for a Special Refund Program for homeowners with property tax with an increase of $300 or more and the increase was more than 12 percent from the previous year. Regardless of income, all homeowners may apply and there is no refund maximum amount.

Levy limits

Local governments are restricted on the amount of property tax from year to year. The Minnesota legislature may determine the limits and levy limits are a simple means of control on property tax bills. No refunds or applications are required.

Property Tax Deferral

Homeowners at least 65 years of age or older, and whose total income is $60,000 or less, may apply for a property tax deferral. The Minnesota Department of Revenue will attach a lien to the property.

Veterans

The Commissioner may pay up to $2,000 in property taxes for a qualified taxpayer and owner of homestead property that was awarded the Congressional Medal of Honor.

Commercial Exemptions

Agriculture property exemption

Any agricultural facility that contains agriculture chemicals and manue pits is exempt, or may be exempted by a local tax agency. Property used for an agriculture processing facility may be exempt. All stock of nursery operators is exempt from property tax.

Conservation property

Wild energy conversion (WEC) systems are exempt from personal property tax, but subject to wind energy production tax. Electricity produced by WEC systems located in incentive zones is exempt from the wind energy production tax.

Incentive zones

Designated zones in Minnesota are eligible for tax incentives. There are two job opportunity building zones with tax incentives. Personal property and real property improvements, in the incentive zones, are exempt from property tax.

Leased property

Leased property is taxable to the property owner. However, if property is used or leased for a non-profit or otherwise exempt property, then lessee is responsible for property tax. Concessions operated at airports, public facilities, utility owned land, certain government-owned property and Native American land are exempt.

Pollution control property

A taxpayer must file a declaration to exempt personal property used exclusively for control of air, water or land pollution is exempt, including heavy machinery and equipment.

Tax Collector and Officials

Minnesota has 1,527 tax assessors; 250 are elected to four-year terms; 1277 are appointed to indefinite terms. The county treasurer collects current and delinquent property tax. County Assessors maintain and set property valuations. The County Auditor certifies property valuations.

Forms

To claim the taxpayer refunds for homeowners (income based and Non-income based) and renters (income based) complete form M1PR. This form is available from http://www.taxes.state.mn.us/taxes/prop_refund/forms/m1prfillin_07.pdf

  • Michigan Treasury Department
  • Property Tax Division
  • Mail Station 3340
  • Saint Paul, Minnesota 55146-3340

Forms due dates

Applications for deductions against real property must be filed with an affidavit to the local tax collector in Minnesota by May 1 and must be filled again if the property changes owners.

All deductions for real property require that the ownership must be recorded as of March 1 of the assessment year for taxes payable the following year. Manufactured and mobile homes must be owned by January 2 to be eligible for the deductions to be applied to the tax bill for that year.

State assessor's manual

  • Minnesota Property Tax Administrators Manual
  • Minnesota Department of Revenue
  • Property Tax Division
  • Mail Station 3340
  • St. Paul, Minnesota 55146-3340
  • Phone (651) 556-6091
  • Price $25.00

How property tax determined

Residential property is assessed at 50% of market value and the assessor determines the fair market value. Mobile homes may be assessed as real property only when the owner of the mobile home is also the assessed owner of the land on which the mobile home sits. Most mobile homes are taxed as personal property. The assessor may use three methods.

Cost Approach

At current labor and material prices, estimate how much it would take to replace the property with one similar to it. Use this method when there are no sales of comparable properties.

Income Approach

For an apartment or office building, estimate how much income the property can produce.

Market Approach

Use other comparable properties that have sold recently, determine the most probable sales price of the subject property.

Appeal Procedure

Minnesota has two appeal procedures: one step appeal and four-step appeal.

One Step Appeal

In one step, a taxpayer can appeal to the Minnesota Tax Court, regular division. A homeowner may wish to hire an attorney, since the proceeding follow the Minnesota Rules of Civil Procedure; however, the taxpayer is not required to have an attorney.

Four Step Appeal

If four-step appeal process is used, taxpayer must exhaust all administrative appeals in sequential order before asking for a judicial review. Taxpayer must pay the property tax, under protest if necessary, before the court will hear the case. First Meet at an informal meeting with local assessor to resolve the issue. Second File a protest with the Local Unit Board of Review to resolve an incorrect assessment notice. Local Boards of Review convene on April 1st. Applications for the first appeal are made to local boards of review during April and May Third File an appeal with the County Board of Review (or County Board of Equalization) to resolve an incorrect assessment notice. State Board of Equalization convenes on April 15 Fourth If not satisfied, appeal in writing to the Minnesota Tax Court. The last day to file a petition in the District Court or Tax court is May 15.

Additional tax classifications

Agricultural property tax

Agricultural is Class III and Timber Cutover is Class VI. All assessed at 100% of market value. Agricultural real estate is assessed at net earning capacity value and 100% of productivity. The assessor establishes agricultural income using prices, expenses, production and local conditions

Commercial property tax

Commercial real estate is Class IV and assessed at 100% of market value. Industrial real estate is Class V; Developmental if Class VII.

Personal property tax

Personal property is Class II and taxed at 100% of market value.

Additional tax bills and charges

Construction Work in Progress

Any property valued over $1000 is assessed annually as of construction work completed as of January 2.

Corrected bill

When an error is found on the original tax statement or when property owners go before the Board of Review, resulting in tax increases or decreases, a correct bill is issued when the corrections are made. Corrected bills are also issued when levy rates are wrong, the house is on the wrong tax lot and for homeowner exemption.

Delinquent taxes

Delinquent balances are applied to subsequent bills. A taxpayer may apply to have late charges, interest and property taxes canceled due to undue hardship or property damaged by a casualty loss event. No notices are sent for delinquent taxes in Minnesota.

Penalty and Interest charges

Homesteads are assessed 2% penalty on payments missed for first installment from May 16 to May 30; 4% on June 1; 5% on July 1; 6% on August 1; 7% on September 1; and 8% from October 1 to December 30.

Homesteads are assessed 2% penalty on payments missed for second installment from October 16 to October 31; 6% on November 1; 8% on December 1 and 10% on January 4.

TIF

Tax Increment Financing (TIF) taxes can be assessed by the county board for specific purposes as deemed necessary. Some counties combine TIF taxes with the tax bill; other counties have a separate billing.

Current Legislation and Pending Issues

Minnesota has a web online Property Tax Project, subtitled Working Together to Create Solutions. The House of Representatives offers a webpage for taxpayers to comment on how to confront increasing property taxes. This venue encourages taxpayers to tell their story and explain their experience with property taxes in Minnesota. http://www.house.mn/dfl/ptax/propertytaxproject.html

References





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