Ask the Assessor
Question: “Why are the tax bills due in the first half of the calendar year higher than the two before them?”
Answer: The four quarterly tax bills you receive are for a fiscal year (July 1 through June 30) that straddles two calendar years (July through December and January through June).
Because the total valuation of property in the town and other financial information usually is not available until the Fall, the first two quarterly tax bills of the fiscal year (covering July through December) are estimates based on the average of the previous four quarters’ bills.
By the October-November timeframe, final values are completed, and a new tax rate is usually set in November. This timing allows any change in values and any change in the tax rate to be reflected in the January through June tax bills.
Because the two quarterly bills covering July 1 through December 31 were estimated, your new value and the new tax rate get applied to your remaining two bills for the fiscal year – meaning any increase over the previous fiscal year is spread across just those two bills. This makes the January through June bills be a greater amount than the previous two bills.
Let’s look at an example: In Fiscal Year 2022, the tax rate was $17.38 per thousand dollars of valuation. The owners of a house and land on Chamberlain Street were assessed $373,200 and paid $6,557.44 in taxes. The quarterly average of this total is $1,639.36.
In the current Fiscal Year 2023, this property’s first two quarterly tax bills were $1,639.36 (July-September) and $1,639.36 (October-December) – as just explained, the average of the previous four quarterly bills. But, now, the parcel is assessed at $422,900 and the tax rate is $15.40.
Having already paid $3,278.72 for their first two quarters, the owners have a balance of $3,308.53 for the final two quarters. This amount is divided in half, for a third quarter bill of $1,654.27 and a fourth quarter bill of $1,654.26.
In this particular case, while the assessed value rose by $49,700 – a 13.3% increase that was not unusual for Fiscal Year 2023 values – the overall bill only increased by $29.81, because the tax rate dropped by $1.98, an 11.4% decrease. And, the $29.81 was spread across the final two quarterly bills, making them $14.91 and $14.90 higher, respectively, than the first two quarterly bills.
Next Article: “If I let an Assessor inspect my property, will my taxes go up?”
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