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(Continued from last article) Regardless of whether or not the results of you tax payment on a more local level is more obvious than the results of the tax payment collected by the government, both are nevertheless important, and as such, both should be given serious consideration. That being said, we now go back to the topic at hand: taxation in the state and local levels.

The first thing that we remember, and this is quite obvious but could never be stressed enough, is that each state has a different tax system from the other state. While this fact should be common knowledge, there have been some cases of people being shocked at the different tax rate they have to pay in the event that they move from one state to another (whether the move was for personal or professional reasons). But that doesn’t have to mean that these systems and rates would be vastly different.

Again, in the United States, the local governments are very much concerned with property taxes, more often than not, taxes on real estate. While it is true that income tax is also levied by the state and local government (to be discussed later), property taxes – real estate taxes in particular – are generally thought of as more favorable than income tax in this level. The reason why property taxes are considered better than income tax in the point of view of the government is because the tax that is charged in this case always generates the same value of revenue. Income and sales taxes tend to fluctuate because of things like shortfalls, and dependence on income taxes and sales taxes leave insufficient funding and other deficits in the budget.

In any case, property taxation in the United States of America is levied in terms of two things – the value of the land, also known as the site value, and what is going to be done to “improve” the land, also known as the building value. For the most part this is only true for property that will be used for business purposes and the like, although some states in the Unites States of America also opt to levy a tax on personal property. That being said, we go back to how the value of the property is assessed.

In order to determine the value of the real property concerned, we need a property or tax assessor, who is a trained expert in figuring out how much a particular property is worth – in the United States of America, the property or tax assessor is actually a person who appointed or elected in the local government, and his job is primarily to calculate the value of every taxable property in the county, municipality, city or township of his or her jurisdiction. While there are of course property assessors who work for the benefit of insurance companies, the local government-elected property or tax assessor’s primary goal is to provide the information the government needs in order to figure out the right rate of taxation to be levied so that the community in question may be appropriately supported by the money collected annually. So in a way, assessors in the United States of America con be considered as ones in a very specialized profession; “assessors” in America who are not elected for this job but are working for private companies are thus referred to by other names such as “appraiser” or adjuster”.

But going back to the point: the tax assessor offices that exist in each local government keeps records and inventories of information that pertain to changes or improvements to real estate. This way, the locality is kept up-to-date with regards to taxable properties and their values. Also, with the help of surveyors (that is, those people who study data that supports the establishment of property boundaries – at least, in this context), they also maintain what we call tax maps, which contain individual properties and are uniquely identified. The purpose of these records, particularly these tax maps, is to make sure that there will be no properties left out from the tax rolls. The tax maps also ensure that a property is not taxed more than once in a single tax year.

One cannot say that the assessor’s duties are particularly easy. There are many ways by which the value of the land and the value of the improvement can be determined in the context of real estate, and these involve things like the market value or replacement value of the property as well as the income approach (which involves income generated by the property). In most cases, the public is also given the chance to question the valuation determined by the assessor, and thus this property owner’s appeal will subject the assessor and his assessment to a judicial or administrative review, based on the contention.

In any case, the value of property taxes is pretty much dependent on the fair market property values of each individual property or estate. So what the assessor of the locality actually does is to calculate the property’s value, figure out the established assessment rate off of that, and then applying said assessment rate to the fair market value. He or she multiplies the the tax rate by the assessed property, thus arriving at the appropriate value of the tax due. The taxes are then collected (not by the assessors, but another government official) by locality – that is to say this tax is collected per city, per county and per district. What this tax funds includes budgets for that municipality’s or area’s schools, parks and recreation establishments and programs, medical institutions and services, industrial maintenance, libraries, public safety services and institutions, and other places and services that are a benefit to the local community.

Lately, property taxes in the United States of America have become more expensive compared to property taxes that are levied in other countries, when in the past the rates were pretty much similar. In fact, in certain states, the rate of property taxation has risen to more than five percent and has become the main payment to be concerned about after the construction of a building or some such real estate, as those who will own or rent spaces there will henceforth have to pay that inflated tax. Of course, this particular tax did not inflate for no reason whatsoever: the way things are going in America today, the States and other local governments of the country have to now find ways to support their own infrastructures (which includes not only the schools, but also basic benefits like public security, health care, and structures like roads and bridges). The federal government has the benefit of falling back on personal income taxation. (To be continued in next article)