3.0. HRSR 02-05-2001 - Laserfiche WebLink

Home Browse Search

The developer's new office building is expected to have a market value upon completion of$3,860,000. Using the same procedure employed above to calculate tax capacity,the annual taxes due on the new property will be$168,662. • Calculation of Tax Capacity and Taxes Assessor's Estimated Market Value of New Project (Land and Building): $3,860,000 To calculate Tax Capacity, apply Class Rates to Market Value: Market Value subject to 3.4 percent rate: $3,860,000 less $150,000= $3,710,000 2.4 percent Portion of Tax Capacity(First $150,000): $150,000 x 2.4 percent = $3,600 3.4 percent Portion of Tax Capacity (Over $150,000: $3,710,000 x 3.4 percent = $126,140 Total Tax Capacity: $3,600 plus $126,140 :$129,740 To calculate Taxes paid, apply Tax Rates to Tax Capacity: Sample Tax Rate for Taxes Payable in 2001: 1.3000 (can also be shown as 130.00%) Total Taxes Paid: $129,740 * 1.3000 = $168,662 Calculation of Estimated Tax Increment Future Annual Taxes $ 168,662 Original Annual Taxes - 780 Annual Tax Increment: $167,882 • Upon completion,the$780 will be known as the original taxes(under state law,the method of calculation is based upon the original tax capacity rather than original taxes - one of many complications in the specifics of TIF). The taxes derived from the original taxes will continue to be paid to the school district,county,city,and other taxing jurisdictions throughout the life of the TIF district. The tax increment estimated at$167,882 per year can be used for various project costs allowed under the law. Over the next 11 years,the tax increment cashflow would look like this: Year of District Annual Tax Increment 2000(Project is built) 0 2001 (Project is assessed) 0 2002 (First Increment Rcv'd) 167,882 2003 167,882 2004 167882 2005 167882 2006 167,882 2007 167,882 2008 167,882 2009 - 167,882 2010 167,882 • Total Tax Increment 1,510,938 Total Present Value of Increment(@ 8.5%) 872,629 Ehlers and Associates- How to Calculate TIF -