Thursday, November 1, 2007

What is the Machman's idea of Acquisition Value Taxation?

Acquisition Value Taxation –

Executive Summary or Overview 23 Oct. 07
by D-Bell:

- County Assessors use acquisition value method of valuation.
- Base assessment value determined by “look back” to the years 2000 through 2005 and averaging the then “market values”, rolling average.
- If after 31 December 2005, the property (residential and commercial) sale price adjusted, minus Real Estate Commissions, and curb appeal expenditures not directly having a bearing on actual property value.
- Form is filled out (and sent to Assessors) at closing, detailing these price reductions to arrive at honest acquisition valuation.
- Utah must become a full disclosure state (under penalty of perjury).
- If a “brother-in-law deal” or other than arms length transaction, Assessor negotiates appraised value with home owner and/or licensed appraiser. Same if new construction with volunteer labor, etc. Becomes base assessed value for taxation.
- Any changes in use or classification, additions, improvements or repairs from natural disasters are reassessed using prevailing square footage or actual cost data for such modifications. An assessor responsibility - using building permits and legal enforcement of mandated reporting responsibilities from property owners, licensed and bonded contractors, appraisers, etc. Heavy fines imposed for violations. Enforced by County Attorneys in collaboration with Assessors.
- Base property assessment is reassessed each year by the lesser of three percent (3%) or the Cost of Living Allowance (COLA) by January 30 each year.
- Assessed value may not exceed the market value. If the assessed value is higher than the market value the assessed value must be reduced to the market value.
- Natural disaster repairs within 125% are not re-assessable.
- Partnerships, S Corporations, Corporation transfers of ownership accounted for.
No transfer of property deemed if: between husband and wife, surviving spouse or due to dissolution of marriage, or upon death of the owner.
- No transfer of property deemed if between owner and another for whom the property will qualify as owner-occupied single-family dwelling within one year of the death of the owner if the new owner was legally or naturally dependent upon the owner immediately prior to the deceased owner’s death.
- Ownership transfers between immediate family members which have been legally willed or deeded said property or named in a trust, are exempted from inheritance taxation and retain the acquisition value assessed market valuations as if no death had occurred. But a resale is based upon the new acquisition value.
- No (owner) fault or penalty for Assessor errors.
- Property taxes must directly benefit property owners exclusively and are not related to education, health services, libraries, law enforcement, emergency services.
- Include Fire Districts only as property tax related service.
- Segregate all secondary school and higher education districts from “Property Taxes”.
- Completely separate all non property tax related taxing entities into homogeneous groups.
- Rename “Utah Income Tax” to “Education Tax”.
- Administer and dole out proceeds to secondary school districts, and higher education from the State Tax Commission with the advice and consent of the legislature.
- Limit tax dependent exemptions to a maximum of five (5)/family. Gradually phase it in over ten years, for example, allowing family planning and budgeting.
- Require accountability for all taxing entities to legislative represented and private citizen commissions (public service commissions) from each non property tax related taxing entity:
- County Public Libraries
- County Public Health, Mosquito Abatement, Paramedic and EM Services
- County Law Enforcement (include 911)
- Water District
- Require these meet and form budgets in the same place and at the same time.
- Make it a felony to form a budget and then task Assessors to “go find the money”. Receive money from taxes first, then formulate budget within monies available or go to jail for five years minimum.
- Individual taxing entities allotted funds from a user fees and sales tax revenues, collected at State level (tax commission) and parsed to the counties based upon proven and accountable requirements (not needs or nice to haves) administered and checked/balanced by the people (public service commissions).
- They must post revenues allotted versus budgets yearly, on-line as public information. Transparency.
- Maximum tax levy of five dollars per thousand dollars of acquisition reassessed taxable valuation for owner occupied single family dwelling.
- Maximum tax levy for non-owner occupied (second residences) single-family dwelling is six dollars per thousand dollars of taxable valuation.
- FAA Agricultural Land or “Green Belt” assessment standards established. Minimum assessed $2,000/acre, minimum taxed at $50/acre.
- If county levy is less than the max allowed the levies shall maintain the same proportion to each other as represented in the mathematical relationship at the max levies.
- Should County impose an excess levy it requires same proportions and approval of 60% majority of constituents with minimum voter participation level of 40% of registered voters.

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