Assessment Ratio & Gallagher Amendment
Colorado law effectively gives residential properties a break every two years through what is known as the Gallagher Amendment. Under this amendment, the assessment ratio of residential properties drops as residential values in the state increase. In 2003, the assessment ratio on residential property dropped from 9.15% to 7.96%.
What does that mean to you as a property owner and taxpayer?
Simply stated, it means that even though the appraised value of your home may increase, your property tax bill may not necessarily follow. The video below explains the Gallagher Amendment:
The residential assessment ratio is 7.96%, but the assessment ratio for all other properties is 29% (except oil and gas, which is assessed at 87.5% of the actual value of production).Notably, in 2008, oil and gas production and equipment represented nearly 55% of La Plata County's total 2008 property taxes levied.
Mill Levies and Taxing Districts
Note: see Assessor Reports for mill levy values.
Mill levies are the rates of taxation set by each taxing district*.Your total mill levy, therefore, depends on what taxing districts you live in. The County, cities and towns, school districts and special districts each have a separate mill levy, which is noted on the annual tax bill you receive from the County Treasurer.
La Plata County's mill levy is the 4th lowest in the State, at 8.50,representing a very small portion of your total tax bill. The largest portion of tax dollars goes to the school districts. Special districts also receive a large portion, for services which include fire protection, library services, sanitation services, and mosquito control. Under Colorado law, the mill levy of a taxing district cannot be increased without an affirmative vote of the citizens within that district.
The tax bill on a $350,000 home with a tax rate of 35 mills would be as follows:
$350,000 (appraised value) x .0796 (7.96% assessment ratio) = $27,860 (assessed value).
$27,860 (assessed value) x .035 (mill levy) = $975.10 property tax.
Taxes are collected by the County Treasurer and then disbursed,according to the mill levy, to each taxing district. For additional information about your property tax or assessment, please contact Craig Larson, County Assessor.
*Taxing Districts: The Division of Local Government, (a sub-division of the Colorado Department of Local Affairs), is responsible for maintaining contact information for taxing districts.
Property Tax Formula
Property tax is based on the following formula:
- appraised value of your home
- multiplied by the assessment ratio
- multiplied by the mill levy
But what is each of these values and how are they established?
The appraised value of a home (also known as the current or actual value) is determined by the Assessor's Office based on sales activity for a given period of time. (Note: for 2011 and 2012, the current value will be based on sales through June 30, 2010.) Since property values change, the Assessor's Office must, by law, re-establish a home's appraised value every two years.
Discovery of Property
This is the process of using data sources, field work, and permits to ensure that all taxable property that is assessable, as of January 1st of each year, is valued with a correct inventory for the applicable tax year, 39-1-105. Please contact the appropriate building or planning department in the city, or if in a rural area, the county about the permitting process.
This is the process of correctly maintaining the ownership of taxable properties in order that the correct bill is sent to the proper person.This includes reading and interpreting recorded documents and plats and being available to correct mailing addresses authorized by deed or the owners of property.
The Assessor's Office Appraisal staff determines the appraised value of personal and real property in La Plata County for taxation purposes. To be qualified to make these assessments, County Appraisers must have at least two year's experience, attain a minimum of 90 hours of specialized training and undertake 34 hours of continuing education every three years to maintain certification as a "licensed appraiser". Some Assessor's Office staff possess the high classification of"certified general appraiser", which requires 180 hours of classroom training and a minimum of 2.5 years' experience as an appraiser.
Oil & Gas Valuation Process
Colorado values oil and gas production annually. The actual value is based on the prior year's sold production multiplied by the net wellhead price, less the exempt royalties. This becomes the actual value of this natural resource. The actual value is then multiplied by the statutory assessment percentage of 87.5% for primary production and 75% for secondary production to develop the taxable assessed value. This assessed value is then multiplied by the mill levy in the area from which the production is derived to determine taxes.