Ch.6- Equalization and Sales Ratio - County Home Page

Chapter 6

601

601 10

Equalization and Sales

Ratio

Equalization

Overview of Equalization

Equalization

is the

values of real

leveling

property

in

a

process

taxing

by which aggregate

district

are

brought

assessed

to true value

for the purposes of

Equitable apportionment

of monies used for state school aid

distribution of the cost of county

Equitable

government

and shared

budgets Thus

just

equalization

in

property taxation

assessed value is

placed

properties within

to other

assigned

to

an

equalization

entire

a

on

individual

taxing

municipality

is based

on

can mean

district

either

properties

or

is fair and

ensuring

as

a

compared

that the true value In both

just

cases

assessment sales ratio studies

REFERENCES N J S A 54 3-11

601 11

Intra-municipal Equalization individual

Equalization between an

function and

ongoing

assessors

and

the initial

real

in

property

authority property property is

2005

given

a

It is

the

The

supervision

important

just

authority

a

municipality

concern

The tax

with to

county board

of assessors

ascertaining

ensure

share of the

and

is

of tax

assessor

responsibility for ascertaining

charged

bears its

legislatively imposed

municipality

for the

is also

a

within

properties

boards of taxation

county

charged with

responsible

July

54 3-13

is

the value of

of taxation is

by statutory

the taxable value of real

that each individual

property

tax burden

parcel of The board

to review revise and correct assessments

123

after the tax list is submitted this function in many ways

County

including

boards of taxation exercise the

study

and

analysis of

assessmentsales ratios and coefficients of deviation calculated from the sales order

occurring

municipalities

to

with the

a common

municipality

changes only

in

part

level the

common

county

A

of assessments to

through

a

assessor

voluntary

needs to

municipality to bring may file

board may on

municipality bring

all

reassessment

implement

assessments to

a

compliance plan application

a

board of taxation and the Division of Taxation or

assessment

practices

board of taxation may instruct the

assessments

change

of a

If the

county

lack of records

or

level

assessor

Where assessments

county

analysis

A

revaluation program based

implement changes

assessments to of the whole

municipality

implement a

the results of statistical may choose to

in each

or

may

on

assessments to

their

own

are

assessor

initiative hold

ensure an

improper

equitable

to

a

change

hearings

the

and

basis

REFERENCES N J S A 54 1-35 1 N J S A 54 1-35 3 N J S A 54 4-2 25 N J S A 54 4-23 N J AC 18 12-1 1

601 12

Inter-municipal Equalization Equalization equalization

in the

aggregate

between

municipal equalization aggregate

is to

municipalities equalized

municipalities

in

an

within

county

a

or

inter-

The purpose of equalization in the

apportion budgets

shared

two

by

equitable fashion based

or more

upon the overall true

or

value of taxable ratables contained within the individual

municipalities

Although equalization

in the

feature of New

Jersey tax laws since

1799 it

into standardized

July 2005

is another way of saying

practice

in any

major

aggregate

sense

was

has been

a

not translated

until the mid 1950 s

124

At that time the

the Director Division of

legislature empowered

Taxation to determine the ratio of aggregate assessed to true value of real estate in every

In

municipality Supreme

measure

notice of the Director s their

equalization

county boards

aggregate

functions

their function of

cases

the New

Jersey

of taxation to take official

assessed to true value ratios in

The court noted that any reasonable

and efficient mode could be

fulfilling

the assessment-sales

the level of assessments in every

subsequent equalization

Court instructed

Jersey The

district in New

implemented

Director Division of Taxation ratio program to

taxing

aggregate

adopted by county

equalizing aggregate

boards of taxation in

ratables of

municipalities in the

Equalization nature

It is

a

function that is

tax administrators and

apportionment the

is

aggregate

delegated by

county

of money

quasi-legislative

or

the

legislature

to

in

county

boards of taxation in lieu of a direct

being

has

legislative

made

by

apportioned

the

legislature

certain funds

At times in

directly

In

the

past

the

discharge

of this

legislative

of a

county

board of taxation is to seek all information and

objective

legislature

enlightenment that assessment ratios

or

quasi-legislative

function

the

will assist in the determination of correct This

taxes and other shared

permits

budgets

a

fair

apportionment

of county

to be allocated among

participating

municipalities REFERENCES N J S A 54 3-11 N J S A 54 3-16 and17 N J S A 54 4-46 and 47 N J AC 18 12A-1 14 g City of Passaic v Passaic Taxation 18 NJ 371

Borough

of Little

County

Board of

1955

Ferry

v

Bergen County

Board

of Taxation 18 NJ 400 1955

July 2005

125

602

602 10

Assessment

Definition and

Sales Ratio -

Purpose

The Director Division Taxation and the both

charged with

annual

Equalized

on

responsibility

October 1 the Director

Valuations

setting

the

previous

conducted

during

county

of equalization

of determining the

responsibility

municipality

Each

the

assessor

the usable sales in the determined

municipality

The

prior

The process is

study

fiscal year

gathering

and forwards the

a

a

July

of sales

completed

The annual

fiscal year

is

sampling

1 to June 30

From

ratio of assessed to true value is

taxable value of real

is raised to true value

determined

the Table of

forth the results of the sales

sampling

aggregate

To meet the

promulgates

information to the Division of Taxation taken within the time frame of

are

true value of each

board of taxation initiates the

information from the

board of taxation

county

through

use

property

in

a

of the ratio

completed by averaging the adjusted

year true value and the current year true value to calculate the

average ratio REFERENCES N J S A 54 3-17 and 18 N J AC 18 12A-1 17

City of Passaic v Passaic County Board of Taxation 18 NJ 371 1955 East Windsor Township v Mercer County Board of Taxation 89 NJ SUDer

App

Div

1965

602 11

Classification of Real The first

step

July

2005

for Sales Ratio

in the classification process is for the

determine if the real Taxable real

Property

property

property

is taxable

is classified

by

or

the

exempt

assessor

assessor

to

from taxation into

one

of four

126

broad

property classes according

classified

separately according

valuation

are

sales of

property the

All

Ratios

property

aggregate assessed

Proper classification

use

and

development of assessment

are

developed

for

Class ratios

property

value of each of the

Class 1

Vacant land

Class 2

Residential

Class 3A

Farmland

regular

Class 3B

Farmland

qualified

Class 4A

Commercial

Class 4B

Industrial

Class 4C

Multi-family

is further classified

more

only are

the taxable

calculated from

following

four classes

as

15B

Other School

15C

Public

15D

Church and Charitable

15E

Cemeteries and

15F

Other

Property

exempt along

Graveyards

Exempts

exempt property

recorded with the

However class 15

follows

Public School

class the

than 4 units

is classified under class 15

15A

property

is

property

exempt property

When

Exempt property

use

The assessment sales ratio program is based

classes of real

of taxable

to its

critical to the accurate

sales ratio statistics on

to its

sells the

would be if it

property property

with the

assessor

must determine what

were

taxable

class that it would be if it

appropriate

The sale is

were

not

comment as either usable

or

non usable

The net total assessed value for taxable the calculations used in the

Equalized

July

2005

property

development

is the basis for

of the Director

s

Table of

Valuations

127

The net total assessed value of each limited

exemptions

of taxation

and abatements is

by January

exemptions

10 of the tax year

Type

The

type

Fire

F

Fallout Shelter

54

P

Pollution Control

54 4-3 56

W

Water

G

Commercial Industrial

I

Dwelling Exemption

40A21-5

J

Dwelling

Abatement

40A 21-5

K

New

Dwelling

Conversion

L

New

Dwelling

Conversion Abatement

N

Multiple Dwelling Exemption

40A 21-6

o

Multiple Dwelling

Abatement

40A 21-6

U

Urban

Zone Abatement

54 4-3 139

Suppression System

Sewerage

Enterprise

reported

tax list district summary

After

year

Property

40A 21-5 40A 21-5

to the state is extracted from the the information the

reviewing

Administration Branch

January

10

Should the

property for

promulgation

buildings

a

of the

county

taxing

as

county

by April

a

15 of the tax

reflect the

change

shown

board

district

to the

prior

the

assessor on

adoption

and

by

the

county

board to

in the assessed value

of assessed value for each of the four the SR-3A information

incorrect the

the tax list

table both the tax list and

county equalization

analysis of assessment-sales information

by

by

on

board revise the assessed values

the SR-3A information must be corrected

shown

county

It is essential that the SR-3A information agree with the net

district summary submitted to the

The

48 4-3

copy of the information and forwards

total assessment for land and

of real

A S

40A21-7

Exempt

The SR-3A information

copy to the

following

54 4-3 59

Exemption

one

board

54 4-3 13

Control

keeps

county

of limited

Statute N J

E

board of taxation

2005

to the

reported

and abatements deducted include the

Code

July

class exclusive of

property

resulting calculations

is made

property

If the

on

the basis

classifications

property

class

as

assigned

will be inaccurate and the

is

taxing

128

district could lose more

substantial amount of state school aid

a

or

pay

than its fair share of county costs

Form 12b

SR-3A -

REFERENCES N J A C 18 12-2 1 N J A C 18 12A-1 17

602 12

Assessment Sales Information

Reporting

All three levels of

responsibility

government within

for the collection and

and sales data recorded and Table of

Equalized

transactions is collected

New

Jersey

warehousing for

analyzed

Valuations

assessed value and other

assessor

3

a

by county

facts

on

the Director s

the sales

concerning

boards of taxation

and the Division of Taxation

a

of the assessment

calculating

Information

pertinent

have

price

sales the local

Sales and assessment

data is collected and

reported

Division of Taxation

In hard copy the information is referred to

an

in electronic format

SR-1A and the electronic transfers

When sales of real

county deeds

clerk are

or

property

are

are

form format sale

by completing

showing

the

following

or

days

of the

board initiates action

section

abstracts of

board of taxation in either hard

county

county

as

recorded at the office of each

copy or electronic format Within 10 ten deed information the

the

in SR-1A format

registrar of deeds photocopies

forwarded to the

prescribed by

one

on

receipt

of the

the SR-1A

deed information for each

fields of information

The date the form is initiated The

name

name

of the

of the

indicating

county

taxing

the

the numeric

county

district the numeric

property

code and the

taxing

district code

location

The deed book and page number references The deed date and the

July

2005

recording

date of the deed

129

The amount of

Realty Transfer Fee

Code shown and the

sale

imputed

be stated in the deed

or

any

price

the abstract

or

Realty

Transfer Fee

The sale

price

may

the affidavit of

consideration recorded with the deed The

name

and address of the

grantor

The

name

and address of the

grantee purchaser

Upon completion

of section

transmitted to the tax

assessment information

deed information

one

assessor

seller

for

completion

the form is

of section two

Section two includes the

following

fields

of assessment information from the tax list

Property

Identification

Property

Classification

Condo

Yes -

Class 4

use

or

-

class 1

qualifier

2 3A 3B 4A 4B 4C

No

code if

applicable

Assessed Value of

year of transfer deed date

same as

-

Year of Assessment

Property

block lot -

Land

Buildings Total

Location

if residential Remarks -

Square

foot of

comment to

Determination of usable

living

clarify

nonusable code

or non usable

Additional Blocks and Lots

and Year Built

area

for assessment sales ratio

additional line items included in the -

transfer If the

property transferred

list the

assessor

property as or

the

is

exempt property

were

not

exempt

appropriate taxable property

Form 12a -

on

the tax

must determine what the classification of the

would be if it

nonusable and

class 15

an

explanation

in

The sale is then recorded

class with

the

a

comment of usable

remarks section

SR-1A

REFERENCES N J S A 54 4-31 N J A C 18 12 1 1 and 18 12A-1 17

July

2005

130

602 13

Return of the Assessm nt-Sales Information Within three weeks after should make

assessor

for the sales ratio

a

study

receiving

the sales information the

determination After the

the information is returned to the

assessor

usability of the

completes

Each sale is

sale

the SR-1A

county board of taxation

forwarded to the Division of Taxation

unique identifying

the

on

to be

assigned

a

number before the information is transmitted to

the Division of Taxation

The final determination of usable

nonusable for each sale lies with the Division of Taxation assessor

may further

sale and

challenge

investigate

the circumstances

the Division of Taxation

or

The

surrounding

a

determination of

s

usability or non-usability REFERENCES N J A C 18 12A-1 17

a

Township of Howell

Division of Tax

99 NJ SuDer 11 394 1968

602 14

v

1 ii

Appeals

1968 Cert Denied 51 NJ

Final Distribution of the Assessment Sales Information The

county

board of taxation transmits the assessment-sales

information SR-1A to the Division of Taxation in the format

prescribed by by

the division and in accordance with the schedule set More

the division

close of the

provides taxing

a

frequent

sampling period

hard copy of the

transmissions

The

county

are

required

near

the

board of taxation

completed SR-1A

district and maintains the information

information to the

as a

public record

REFERENCES N J A C 18 12A-1 17

602 15

Tracking

2005

Maintaining

a

board of taxation

The

county

and

supervises

system July

and

the

assessor

a

1 iii

Log of SR-1As the agency that initiates the SR-1A must

use an

accurate

to track the SR-1As that have been

accounting

conveyed

to each

131

municipality returned

and track the SR-1As

The Division of Taxation

serial numbers to be used within SR-1A is least

assigned

once a

division

a

assigns fiscal

each

county

block of

a

sampling period

Each

serial number from the block of numbers

month the

county

report showing

a

a

and

they are completed

as

the

board of taxation

provides

At

to the

following

The number of SR-1As created The number of SR-1As returned

by

the

assessor

The number of SR-1As in the hands of the A

report showing

the

length of time

individual SR-1As may also be

assessor

an assessor

has retained

requested

REFERENCE N J S A 54 35 1 to 35 6 N J AC 18 12A-1 17

602 16

Informal Review of the Assessment-Sales Information The Division of Taxation each state

county

periodically provides

board of taxation

a

see

which sales usable

non

and to view the determination made The

of sales

listing

Review of the list allows both the

board to

listings

are

promulgated

requested by form with

-

-

processed by

assessor

and the

and the

county

tax

processed

the Division of Taxation final assessment-sales ratio

Equalized Valuations

to the sales information may be of a

taxing

district

by

the

filing

of an SR-6

documentation

Assessment Sales Ratio -

Exhibit 19 Form 12c

an assessor

supporting

Exhibit 1B

by

preliminary input to the

changes

assessor

usable have been

in the Director s Table of

Corrections and

each

Assessment Sales Ratio

Grantor List Nonusable -

-

Grantor List Usable

SR-6

REFERENCES N J AC

July 2005

18 12A-1 17

132

602 17

Director

Th

The final Director

Tabl

s

product

of

Equalized

Valuations

of the assessment sales ratio program is the The table is

Table of Equalized Valuations

s

columnar form and for each The

aggregate

Class II RR

taxing

district

prepared

in

displays the following

assessed value of real

property

exclusive of

property

The average ratio of assessed to true value of the real

property The

aggregate

true value of real

property

Assessed value of Class II Railroad Assessed Value of all The

equalized

personal property

valuation

At this time the state does not dedicate railroad not

replacement

currently part

Exhibit 22 -

revenue

of the

Director

s

Property

revenue

specifically as

therefore class II railroad

equalization

is

property

process

Table of Equalized Valuations 2002

REFERENCES N J S A 54 1-35 2

602 18

Promulgation The Director

of the Director Table of

s

s

Table of

Equalized

Valuations is

before October 1 of each tax year deemed

complete

upon

The

delivery of a

the commissioner of education the

municipal each

county

of a ten or

board of taxation

percent

10

with

a

assessor

final

The sales

also receives

listing

are

of the sales

a

on or

is

of a certified copy to the

the tax administrator of

equalized

mailing

of a notice

valuation to the mayor

municipality

if

applicable

copy of the conformed table

along

processed for the sampling period

stratified into usable and non-usable with the

appropriate non-usable July 2005

mailing

chief executive officer of any affected

Each

promulgated

promulgation procedure

and the certified

increase in

Valuations

certified copy of the table to

municipality and

clerk of each

Equalized

code noted

on

the non-usable list

133

In addition to the conformed copy of the Table of

Equalized

Valuations the

a

Table of

county

board of taxation receives the full

Equalized Valuations showing

copy of the

computations

upon

which the table is based REFERENCES N J S A 54 1-35 1

Eaualization 1 of 10

602 19

of the Director

Appeal Appeals the

Change

in

vear

Equalized

taxation is

a

to review upon

complaints

are

in the a

Although

preparation

county

days following board of

of the table the table is a

municipality

The

against

The formula used to

develop

the table

Or the database of sales used to Most of the

complaints

inclusion

exclusion of sales used to

or

the

complaint filed by

filed either

Notification


of the table

participant

-

Valuation

must be filed with the Tax court within 45

promulgation

subject

s

October 1 -

develop

the class ratios

in recent years have been based

develop

on

the

the class ratios

REFERENCES N J S A 54

July

2005

4 1-35

134

603

603 10

Standards for the Assessment

Sales -

Study

Overview The

N J S A 54 1-35 1

enabling legislation

Director Division of Taxation to

promulgate

Valuations to be used in the calculation and distributions

pursuant

statute is silent valuations

The

for the

Table of

a

Equalized

to the State School Aid Act of 1954

the

methodology

used to

develop

for the

implement methodology

following premises

and standards

director have been

upheld

validated

through challenges

that have been

or

of

apportionment

The Director Division of Taxation is

the criteria and table

on

provides

the

equalized to set

empowered

development of the

employed by

revised

The

by

the

the courts

adjudicated

REFERENCES N J S A 54 1-35 1 N J S A 54 3-17

603 11

Standards for the Sales Ratio An

understanding

Study

of the definitions instrumental in assessed value

and market value is critical to determine the the assessment sales ratio upon which the Table of

developed

include the

The Director

s

study

Equalized

The

usability of a

premises

sale for

and standards

Valuations is based and

following

Table of Equalized Valuations is

promulgated

on or

before October 1 in each year The sales database is within

a

fiscal year

precedes

the

developed from

July

recording

all sales that

1 to June 30 with

date

by

no more

All assessments reflect the conditions

as

a

are

recorded

deed date that

than six months of October 1 of the

pre-tax

year Assessments must be set by the constitutional and standards

July

2005

The constitution refers to the

same

statutory

standard of value

135

Statutes and

subsequent court decisions equate

value of real

property

as

market value and true value

market value with true value The statutes

study

give

the

provides the county

Equating

set standard for the ratio

board of taxation the

to set the level of assessments in the true value

the standard of

county

at

some

authority

percentage

of

Since 1970 all 21 counties have set their level of

assessments at 100 Real

property

includes

personal property

Market value is means or

all lands and

means

a

the most

in other

affixed to real

synonym for true value

probable price

precisely

property

will sell in

requisite

to

a

or

full and fair value and

prudently knowledgeably

to cash

equivalent

revealed terms at which the

fair sale with the

a

property

in cash terms

competitive

thereon and

improvements

appraised

market under all conditions

buyer

and seller each

and for self interest

acting

assuming

neither is

under duress

Selling

Price

Market Value

True Value stated in terms of

dollars

The sales

property

for the sale to be considered usable for the

price

must

represent the

true value of the

assessment sales ratio study The ratio

study

30 based with the

on

is conducted for

the

county

developed on a

recording

a

fiscal year

date of deeds

clerk in each

county

calendar year

as

July

1 to June

they are filed

Assessments

January

are

1 to December 31

One fiscal year includes 6 months of two calendar years The additional criterion of the time element is the deed date or

the

agreement

of sale

Only deeds

and

Agreements

Sale that have been drawn in the six months

beginning ratio

July

2005

study

prior

of the fiscal year may be considered All assessment data is based

on

of

to the

timely for

the

the

136

circumstances and values set October 1

the

preceding

filing

of the tax list The assessment and the sales same

price

time frame The deed date

must be within the

corresponding

sales

price

the assessment year and the assessment must be from the same

calendar year

Relationships sold

property

of characteristics of property assessed to are

critical The basis for the assessed value

and the basis for the sales

ie

price

the numerator and

denominator of the fraction which make up the ratio must measure

the

The courts in New considered Director The

s

a

property

same

Jersey

sample

Table of

buyer

Equalized

and

one

sale is

for the purpose of developing the

willing buyer-willing

informed

have ruled that

an

Valuation

seller

concept

informed seller

presupposes

as

part

an

of the

definition of market value REFERENCES 1947 Constitution of New Jersev Article VIIISection One-Paragraph 1 N J S A 43 4-23 N J S A 54 1-35 1

35 3

N J A C 18 12-10 2 Presidential Towers

v

City of Passaic

6 NJ Tax

406

Eaualization 2-Julv 30 1970 Procedure for Development and Calculations of the Director -

Table of

Equalized

Eaualization 3-Julv 30 1970 Director

603 12

s

Demonstration -

Nonusable Sales for Assessment-Sales Ratio

18 12-1

2005

-

Table Calculations

The Director has set forth in New

July

s

Valuations

Jersey Administrative Code

specific categories defining

reasons

sales

are

considered

137

nonusable

The

general

nonusable include but

areas

are

that

suggest

a

sale may be

not limited to

Not within the time frame set for the ratio Not between

Lacking sales

in

The Director is

between the assessed value and

in the transfer of the entire of bundle of rights

a

that allows local

N J A C 18 12-1 1

neutral

party

government

of the Director

integrity

authority and weight

s

in the

and

tax

even

to

process

rely

on

a

fact

the accuracy


of the table is

procedures

equalization

taxpayers

of the table and the reliance and

property

willing buyer

of the Standards for Usable Sales

Application

and

and

market value

REFERENCES

603 13

willing-seller

comparability

price

Lacking

a

study

recognized by

use

the

The

statutory

uses

of the table to complete

when the

use

is not

required by

statute REFERENCES N J S A 54 1-35 1

Kearny

Town

v

Director Division of Taxation

11 NJ Tax 232

603 14

Uses of the Director The

statutory

include the

uses

s

Table of


of the Director s Table of Equalized Valuations

following

A measurement of the wealth of a

municipality

for the

distribution of state school aid A measurement for the upper limit of municipal bonded indebtedness A measurement for the upper limit of county bonded indebtedness

July

2005

138

A measurement for the upper limit of school district bonded indebtedness

Calculation of the taxable value of

property

personal

of the formula for calculation of apportionment of

Municipal Purposes

Tax Assistance Fund

Component of the formula

properties

for

calculating

amounts due

in lieu of taxes for certain state-owned

municipalities

situated within their borders

Calculation of state railroad

assessed

used in business

Component the

locally

replacement

revenues

for Class II

property

Component

of the formula for the distribution of state

library

aid

Component of the

New

Jersey

Urban Aid to

Municipalities

calculation

Development

The

of the

appeals

at the

superior

court levels

non-statutory

county

uses

Valuations include but As

a

level for discrimination tax

board of taxation the tax court and the

of the Director s Table of are

basis for the

budgets

common

Equalized

not limited to

apportionment

of county

operating

in 18 out of 21 counties

As

a

basis for

apportionment

of county

As

a

basis for

apportionment

of regional school district

apportionment

of local health services

library budgets

budgets As

a

basis for

As

a

component

which

serve as a

municipality As

July

2005

one

to

budgets

in the calculation of effective tax rates basis for

comparison

of property taxes from

municipality

of the criteria for

determining

the need for revaluation

139

As

a

also As

a

basis for calculation of coefficients of deviation which is a

criterion for

basis for

sector -

by -

basis within

determining

analyzing equity

sector a

or

the need for revaluation of assessed values

neighborhood

taxing

district

Kearny

Town

-

on a

by neighborhood -

REFERENCES v

Director Division of Taxation

11 NJ Tax 232

July

2005

140

604

604 10

Calculating

the Director


s

Procedure for Calculations Set Forth In 1970 the

Valuations

Equalized county

procedure

for calculation of the Director

was

set forth in

boards of taxation all

municipal

clerks

sales database

each

was

municipal

Table of

addressed to all

assessors

and all

used to calculate the class ratios and the

the average

municipality

a memo

s

From 1970 and forward the current fiscal year

year weighted ratio and the

develop

the Director

by

averaging

ratio and the

weighted

The

steps

in the

were

process

employed

equalized

memo are

one

to

valuation for in the

explained

following paragraphs REFERENCES

Equalization 2

Julv 30 1970 -

LPT Memo Procedure for Development and Calculations of the Director s Table of

Equalized

Valuations

Equalization 3

Julv 30 1970 Demonstration of the Calculations for the Table of Equalized Valuations

604 11

-

Calculation of the True Value for Each

Property

The database of sales is

all the

during

developed from

the fiscal year and all sales

of Taxation

as

either usable

further stratified

by property

or

are

In

Step

by

I

I class ratios

developed

are

The

one

the total SR-3A value

ONE YEAR WEIGHTED RATIO

The ratios for each class

2005

Division

the total true value

Step

July

by dividing

sold

The usable sales are

calculated and the true value for each class is year weighted ratio is calculated

properties

categorized by the

nonusable

class

Class

are

calculated

141

To illustrate The class ratios

are

developed by dividing

the total of the

assessments for all usable sales in the class

usable sales

The

prices

resulting

ratio is

Total Class

No of

actually

a

percent

Total Divided

Assessed

Sales

By

Value

Class

Sales

Equals

Price

Ratio

5

1 960

4 000

49 00

10

150 750

300 000

50 25

Farm

5

25250

49336

Qualified

0

0

0

50 25

Other

5

30 600

60 000

51 00

25

208 560

Vacant Residential

TOTAL

0

18 51

413 336

The residential ratio is used if any class of sales from which to

develop

the

Oass

one

year

Residential Farm Qualified Other TOTAL

weighted

by

the Total True Value to

ratio

1970 SR3-A

Divided

Oass

Valuation

By

Ratio

Vacant

does not have

assessed value

The total SR-3A Valuation is divided

develop

property

ratio and the residential ratio is

a

used for Qualified farm

always

of those

by the total

Equals

Property

Oass

True Value

125 000

I

49 00

255 102

11 500 000

I

50 25

22 885 572

375 000

I

51 18

732 708

1 000 000

I

50 25

1 990 050

2 000 000

I

51 00

15 000 000

3 921 569 29 785 001

The residential ratio is used if any class of property does not have sales from which to

always

July 2005

develop

a

ratio and the residential ratio is

used for Qualified farm

assessed value

142

604 12

1970 SR-3A

Divided

Valuation

By

15 000 000

I

District

Property Equals

Class True

Weighted

Value

Ratio

29 785 001

50 36

Calculation of the Prior Year Adjusted True Value The current year true value is true value

The

prior

year

averaged

adjusted

with the

prior year adjusted

true value is calculated

as

follows

Step The

PRIOR YEAR ADJUSTED TRUE VALUE

II

prior year adjusted

true value of the

summing

the

prior

true value is determined

by calculating

the

year added and omitted assessments and

prior year aggregate

true value and the calculated

true value of the added and omitted assessments

True Value of 1969 1969 Certified

604 13

1969 Added

1969

True Value Real

Omitted

Property

Assessments

Ratio

24 000 000

20 000

50 00

Calculation of the

District

Certified

Weighted

1969 Added

by

the

one

40

Average Weighted

value

averaged

24 040 000

000

Ratio

by dividing

with the

the SR-3A

step

one

The

prior year adjusted

The current year SR-3A value is then divided

average true value to calculate the average

July 2005

Co14

CoI 3

year weighted ratio calculated in

current year true value is

Adjusted

True Value CoI1

Col 2

The current year true value is calculated value

Omitted

Assessments

by

true

the

weighted ratio

143

Step

III

AVERAGE WEIGHTED RATIO

Calculation of the current year true value

1970 SR-3A

Divided

Valuation

By

15 000 000

I

District

Weighted

CURRENT

Ratio

29 785 544

True Value to obtain the

Current 1970 True Value

1969

TRUE VALUE

50 36

The Current Year True Value is then

Adjusted

Equals

Adjusted

True Value Real

with the Prior Year

averaged

Average True

Value

Property

Average

1969

1970

True Values

2

29 785 544

24 040 000 26 912 772 2

The Average

Aggregate

Valuations is

Average True

By

VaIue

I

26 912 772

15 000 000

Calculation of the

Aggregate

2005

Table of

the Current Year

by

the

developed

1970 District Equa Is

Average Ratio

Weighted


Assessed Value

Average Weighted Value of Real

s

55 74

Equalized Valuation

A conformed Table of

July

computed by dividing

DIvided

-

Property

in the Director

Value

1970 SR 3A VaI uatIon

1

developed

Assessed Value SR-3A Value

Average True

604 14

Ratio

-

Equalized

Weighted

is six columns

SR-3A is divided

Ratio to arrive at Column 3

Property

by

Column

Column 2

Aggregate True

The Assessed Value of Class II Railroad

in Column 4 and the Assessed Value of Personal

Property

144

used in Business in Column 5

Property

are

added to the True Value of Real

in Column 3 to arrive at the

Equalized

Value of the

taxing

district

The

following

table based

are

on

the calculations that would show

the information in the 1970

calculations of the Director

Step

IV

s

not

conformed

of the

Ratio

CALCULATION OF EQUALIZED VALUATION

At this time the state does not dedicate

railroad

sample

on a

replacement

revenue

revenue

3

4

0

Col4

5

AGG ASSESSED

AVE RATIO

AGG TRUE

ASSESSED VALUE

ASSESSED

VALUATION

ASSESSED TO

VALUE REAL

CLASS II RR

VALUE ALL PERS

TRUE VALUE

PROPERTY

PROPERTY

PROPERTY

55 74

26 910 657

0

266 261

REAL PROP 15 000 000

as

therefore class II railroad property is

currently part of the equalization process 2

specifically

6

EQUALIZED VALUATION

27 176 918

REFERENCES N J S A 54 1-35 2 Kearney Town v Director Division of Taxation 11 NJ Tax 232

July

2005

145

605

605 10

Sample Director


s

Winterberry County Winterberry County

consists of five

taxing districts

Cedar Town

Holly Borough Pine

Borough

Spruce City Wood

605 11

Township

Ratable Base for Districts in

Winterberry County

The ratable base for the Director s Table of for the districts in

Winterberry County

to the Division of Taxation

605 12

is the SR3A values

Sales Ratio Data Base

as

accumulative

sales

The

Exhibit 1B -

Exhibit 19

Sample

-

grantor listings

sampling period

all sales with

a

for

recording date

s

Table of

Winterberry County

is

weighted

of July 1

showing

the

ratios and the

sales used to

develop

a

2001 to June 30 2002

Grantor List Nonusable -

-

Grantor List Usable

Equalized Valuations for reference

Director s Table of

computations equalized

used to

with calculations

Each county

Equalized

develop

2005

Valuations

the average

values and the database of

the ratios

The assessment sales ratio database and the Director

Equalized

presented


provided

board of taxation receives

is

for usable sales and non-usable

Assessment Sales Ratio Assessment Sales Ratio

Director

Valuations

Winterberry County

for the 2002 Director s Table included

The 2002 Director s Table of

July

reported

15 2002

by April

The final sales ratio database for

605 13


are

used to illustrate statistics in

s

Table of

subsequent 146

The ratios from the Director

chapters

example

of county

Exhibit 20

Exhibit 21 Exhibit 22

July

2005

-

equalization

Director s Table -

Table -

s

Table

are

used in the

for tax year 2003

Nonusable Sales Usable Sales

-

Director s -

Director s Table of Equalized Valuations 2002

147

Ch.6- Equalization and Sales Ratio - County Home Page

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