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<br />r <br /> <br />Glossary of Terms <br /> <br />CATEGORICAL AID: Aid given to a local unit of government to <br />be used only for a specific purpose. <br /> <br />CIRCUIT BREAKER: See "Property Tax Refund." <br /> <br />CLASS RATES: The percent of market value set by state law that <br />establishes the property's tax capacity subject to the property <br />tax. <br /> <br />COUNTY PROGRAM AID: State property tax relief aid to counties, <br />distributed with a formula based on needs (households on <br />foodstamps, age of the population, number of serious crimes) <br />and tax base equalization for counties with smaller tax bases. <br /> <br />EDUCATION AID: The total amount of state dollars paid for K- <br />12 education. This aid is paid to the school districts. <br /> <br />FISCAL DISPARITIES: A program in the Twin Cities metropolitan <br />area and on the iron range in which a portion of the commercial <br />and industrial property value of each city and township is <br />contributed to a tax base sharing pool. Each city and township <br />then receives a distribution of property value from the pool <br />based on market value and population in each city. <br /> <br />GENERAL PURPOSE AID: Aid given to units of government to be <br />used at their own discretion. Examples are Local Government <br />Aid and County Program Aid. <br /> <br />HIGHWAY AID: Motor fuels tax and license tab money the <br />state distributes to counties, cities and townships for highways <br />and bridges. <br /> <br />HOMESTEAD: A residence occupied by the owner. <br /> <br />INDIVIDUAL INCOME TAX: A state tax on the income of <br />residents and non-residents with Minnesota sources of income <br />that is deposited into the state general fund. <br /> <br />LEVY: The imposition of a tax, associated with the property <br />tax. <br /> <br />LEVY LIMIT: The amount a local unit of government is permitted <br />to levy for specific services under state law. <br /> <br />LIMITED MARKET VALUE: A state imposed limit on property <br />value increases for the purpose of calculating property taxes. <br /> <br />ASSOCIATION OF <br /> <br />LOCAL GOVERNMENT AID (LGA): A state government revenue <br />sharing program for cities with low property wealth or high <br />service burdens that is intended to provide an alternative to <br />the property tax. <br /> <br />LOCAL SALES TAX: A local tax, authorized by the state, levied on <br />the sale of goods and services to be used for specific purposes <br />by the local government. <br /> <br />LOCAL TAX RATE: The tax rate usually expressed as a <br />percentage of tax capacity, used to determine the property tax <br />due on a property. <br /> <br />MARKET VALUE: An assessor's estimate of what property <br />would be worth if it were sold. <br /> <br />MARKET VALUE AGRICULTURE CREDIT: A state credit to reduce <br />the property tax paid by agricultural homesteads to the local <br />taxing jurisdiction. <br /> <br />MARKET VALUE HOMESTEAD CREDIT: A state credit to reduce <br />the property tax paid by a residential homestead to the local <br />taxing jurisdiction. <br /> <br />PROPERTY TAX: A tax levied on any kind of property. <br /> <br />PROPERTY TAX REFUND: A partial property tax refund program <br />for those who have property taxes out of proportion with their <br />income. This program is available to homeowners and renters. <br /> <br />SALES RATIO STUDY: A study conducted by the <br />Department of Revenue of open market property sales, which <br />is then compared to local assessments to ensure that local <br />assessments adequately reflect the market. <br /> <br />STATE GENERAL PROPERTY TAX: A state-imposed property <br />tax on commercial, industrial. and seasonal recreational <br />properties. <br /> <br />STATE SALES TAX: A state tax (6.5%) levied on the sale of goods <br />and services that is deposited into the state general fund. <br /> <br />TAX CAPACITY: The valuation of property based on market <br />value and class rates, on which property taxes are determined. <br /> <br />November 2006 <br /> <br /> <br /> <br />~ <br /> <br />f Minnesota School -m Boards AssociationJ <br /> <br />II <br /> <br />... <br /> <br />LMC <br /> <br />MINNESOTA COUNTIES <br /> <br />www.mncounties.orq <br /> <br />League of Minnesota Cities <br />Cities promoting exooHence <br /> <br />www.mnmsba.org <br /> <br />www.lmnc.org <br />