Tax Question (please no Hijacking)
 

I am wondering why Laconia has a State Education tax rate that is different from other towns in the State. For Example Laconia is a 2.100, but East Wakefield NH is 1.96. Again this is the state education tax rate, not the local education. Shouldn't the rate be the same for everyone because it is State level?

And to add a second part to my question. How is the town able/allowed to tax people for a Local School Tax Rate when by the counties law and requirement in our bylaws we are not allowed to declare residency at the property and therefore cannot use what I am being taxed on. IM all for paying my share for the services rendered as long as all in the town can use, but if you are going to restrict and then tax anyways on what you are restricting, sort of like 242-250 years ago give or take???? - Has not one fought this legally or has there been case law on this


Obviously they could just dump that amount into the City Tax Rate and get it anyways, but this is a specific line item on the taxes.

IF you can make heads or tails out of this.... first the RSA that explains how this is calculated - followed by the amounts due from both Laconia and Wakefield.

I. (a) The commissioner shall annually determine a municipality's tax base for the education tax by subtracting from the total equalized valuation of all property, as determined under RSA 21-J:3, XIII for the preceding year, property that was then taxable under RSA 82 and RSA 83-F. In determining the tax base, the value of any utility property that is included in the total equalized valuation upon which the statewide education property tax is computed, and is also taxable under RSA 83-F for that year, shall also be subtracted from the tax base, provided the sum value of the utility property represents at least 5 percent of the total equalized value of all property, except property taxable under RSA 82 or RSA 83-F in the preceding year.
(b) The commissioner shall calculate the portion of the education tax to be raised by each municipality by multiplying the uniform education property tax rate by the municipality's tax base.
II. The commissioner shall issue a warrant under the commissioner's hand and official seal for the amount computed in paragraph I to the selectmen or assessors of each municipality by December 15 directing them to assess such sum and pay it to the municipality for the use of the school district or districts. Such sums shall be assessed at such times as may be prescribed for other taxes assessed by such selectmen or assessors of the municipality.
II-a. At the time the warrant is issued pursuant to paragraph II, the commissioner shall report to the governor, the speaker of the house of representatives, the president of the senate, and the commissioner of education, a statement of the education tax warrants to be issued for the tax year commencing April 1 of the succeeding year.
III. Municipalities are authorized to assess local property taxes necessary to fund school district appropriations not funded by the education tax, by distributions from the education trust fund under RSA 198:39, or by other revenue sources.


Far as Wakefield goes -

To the Selectmen or Assessors of WAKEFIELD
In accordance with the provisions of RSA 76:8 II, you are hereby required to assess the sum of $2,153,645 for the 2018 Education Tax. Per RSA 76:3, this amount is based on a uniform rate of $2.170/1000 of the 2016 equalized valuation without utilities in the amount of $992,463,297

And Laconia

To the Selectmen or Assessors of LACONIA
In accordance with the provisions of RSA 76:8 II, you are hereby required to assess the sum of $4,458,870 for the 2018 Education Tax. Per RSA 76:3, this amount is based on a uniform rate of $2.170/1000 of the 2016 equalized valuation without utilities in the amount of $2,054,778,972.

I believe what is reflected on your tax bill is the amount the town owes divided amongst the total tax base, which I assume is done evenly right? :rolleye2:

The education tax rate taxes for each town is based on the fair market value of property, not the assessed value. Otherwise, Laconia could assess property at 20% of market value and the residence would only pay 20% of their share of education tax. The state looks at the current assessment-to-sales ratio of property that sold the past year and applies that rate to determine the town's education tax rate.

Real estate taxes are based on value. Restrictions decrease value. Having a residency restriction for a house one block from the schools could reduce a property value by 30%, but for vacation property, the reduction is trivial. For vacation property, they save a bundle on schools but suffer negligible tax loss. The residents (who can vote) tuck it to the non-voter. Your only recourse is to buy property without that restriction.

Can you explain what these restrictions are?

I'm not talking about a specific restriction. Any restriction reduces the value of property. How much less would you pay if for a property that forbid windows on the first floor or forbid lawn mowing on weekends.. The original poster's restriction is that he/she is not allowed to declare residency at that property so he can neither vote nor send his kids to the public school.

I know of a waterfront condo association in Gilford that has the restriction that the property may not be occupied during January or February thereby accomplishing the same result.

As to the second part of the question, you are questioning why you should be taxed for a specific purpose (education) when you cannot claim residency and therefore could never register children to use the Laconia schools.

Although the tax is listed on a specific line, like all taxes, it is not a fee (tax) for service system. Whether you do not or can not use a particular municipal service doesn't exclude your responsibility to pay for taxes that the municipality requires.

I admit I am hard pressed to think of other examples of municipality spending that a taxpayer could never use but there are certainly tons of federal spending that is targeted to specific uses that I could never access. Yet I still owe my income taxes to support it.

Our town, school, and county taxes are based on assessed value.

Since when?

Assessed vs Market
 

I believe assessed value is supposed to reflect market value, with an adjustment for time or other factors since last assessment. The assessing department for Merrimack NH web page says the last full assessment was done in 2016, and the "Equalization Ratio" is 92.6%. I checked a couple of other sites and they don't make it as obvious, although the info is probably available.

Equalization
 

To keep individual towns from under assessing property to lessen the tax burden the state uses equalization.

Equalization is the process carried out annually by Municipal Assessing Jurisdictions and the New Hampshire Department of Revenue Administration (DRA) which ensures that common property tax burdens are apportioned fairly and equitably among taxpayers.

Sales from a period of October 1 through September 30 of the following year are reviewed in each taxing jurisdiction. Municipal officials indicate whether the transaction is arm's length, and verify the selling price and assessed value. The Sales Ratios (Assessed Value/Selling Price = Ratio) are analyzed by DRA to determine the assessment to fair market value ratio for each taxing jurisdiction. A ratio of 100% indicates that the town is assessed at Market value.

Tilton BB
Good response. Thank you.