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TAX CALCULATION GENERAL INFORMATION PAYABLE 2006 NET TAX CAPACITY TAX: 1. Market Value is placed on property by the County Assessor at fair market value(how much the property will sell for in today's market)based on like sales. The County Assessor also assigns a class to the property according to use. The classification assigned determines the set of percentages to be applied to the Market Value to determine Net Tax Capacity. Percentages are set by state law for each classification and are uniform statewide. The individual tax capacities for each parcel are totaled by taxing authority. 2. To calculate the tax extension rate for a taxing authority, the tax levy adopted by the authority is divided by the net tax capacity or"tax base"of all property located within the boundaries of the authority. To determine net tax capacity, the initial tax capacity of the taxing authority is reduced by the fiscal disparity contribution value in fiscal disparity areas and by the tax increment financing value for authorities with TIF districts. 3. The Tax rates for each authority are added together to determine the total tax rate for that unique taxing area (UTA). Tax authorities include: County, Schools, City/Town, or Special Taxing Districts(In Crow Wing County: Region 5, Cuyuna Range Hospital District, Thirty Lakes Watershed, County HRA, Brainerd HRA, Pequot Lakes HRA and GKWMLLSSD-Garrison Kathio West Mille Lacs Lake Sanitary Sewer District). 4.' The Tax Capacity of each parcel is then multiplied by the Net Tax Capacity Rate of the unique taxing area the parcel resides in. The result is the number found on Line 13 of the Property Tax Statement. Taxes based on market value, state tax or fiscal disparities tax are also added and aids subtracted, if applicable(see below). Special Assessments, such as charges for storm sewers, street improvements, or solid waste service are added to this amount on Line 15. REFERENDUM MARKET VALUE TAX: 1. Voter approved referendum taxes are calculated using referendum market value. For School Districts, a market value referendum tax is required if the money will be used for operating expenses. Starting in Payable 2004, General RMV Other, a non voter approved referendum market value levy,was added to compensate school districts for revenue lost from aid reduction and funding changes. 2. Referendum market value is calculated for all parcels and is equal to taxable market value, except a reduced market value is used for farm homestead property(only taxed on the house, Garage,and 1 Acre portion)or those properties eligible for disability homestead classification. Seasonal recreational properties are excluded from referendum market value based levies. 3. The referendum market value rate is calculated by dividing the referendum market value levy by the total referendum market value of the taxing authority. The referendum market value tax for each parcel is calculated by multiplying the referendum market value rate of the taxing district by the referendum market value for that parcel. STATE GENERAL TAX: 1. Starting in payable 2006, there are two State General Tax Rates. One rate is applied to Commercial-Industrial property to levy 95%of the tax and a second rate is applied to Seasonal Recreational Residential and Seasonal Commercial property to levy 5%of the tax. 2. Seasonal Recreational property: 40%of the Tax capacity on the first$76,000 of market value and the full tax capacity on the remainder value are multiplied by the Seasonal Residential Recreational State General Levy Property Tax Rate certified by Dept of Revenue around Oct. 1 each year. 3. Commercial/Industrial/Railroad/Utilities/Minerals property: full tax capacity is multiplied by the Commercial-Industrial State General Levy Property Tax Rate certified by DOR. Seasonal Commercial Non Homestead (resorts): full tax capacity is multiplied by the Seasonal Residential Recreational State General Levy Property Tax Rate. '` 4. Homestead Seasonal Commercial: Only applies to taxable market value over$2,200,000 (tier-three of Class 1 c). Full tax capacity of the third tier is multiplied by the Seasonal Residential Recreational State General Levy Property Tax Rate. Page 1 of 2 Crow Wing County Auditor