HomeMy Public PortalAbout05-12-2015 Informational Presentation - Residential and Small Commercial Exemption_201505080954357768 TOWN OF
163o WATERTOWN
�- Office of the Town Manager
Administration Building
149 Main Street
=` Watertown,MA 02472
Phone:617-972-6465
Michael J,Driscoll
Fax:617-972-6404
wwcv.water[own-ma.gov
Town Manager townntgr@Nvatertown-ma.gov
To: Honorable Town Coun i!
From: Michael J. Driscoll,Town Manager
Date: May, 7, 2015
RE: Agenda Item-Informational Presentation on the Residential Exemption and Small Commercial
Exemption;and Consideration of filing a Home Rule Petition to increase the Residential Property
Tax Exemption in Watertown
As you recall,the Fiscal Year 2015 Tax Classification Hearing was held at the November 25,2014 Town
Council Meeting(see attachment).
During the Tax Classification Hearing, Francis J. Golden, Chairman of the Board of Assessors, indicated if the
Honorable Town Council wanted to increase the residential exemption beyond the historical 20%, a Home
Rule Petition would need to be filed that would provide the flexibility of voting a potential residential
exemption above 20%(see attachment and excerpts from the November 25a4 and December 9,2014 Town
Council minutes).
As a follow—up,attached please find an email from Representative Jonathan Hecht and a copy of draft
language for a Home Rule Petition to increase the residential property tax exemption in Watertown.
Additionally, at the November 25,2014 Town Council Meeting, there was a brief discussion on the Small
Commercial Exemption(see attached Informational Guideline Release).
Therefore,given all of the above, I respectfirlly request an Informational Presentation be placed on the May 12,
2015 Town Council Agenda. The Information Presentation will be on the residential exemption and small
commercial exemption and will be given by Francis J. Golden, Chairman of the Board of Assessors,
Subsequent to the Informational Presentation, the Honorable Town Council may want to consider the filing of
a Home Rule Petition to increase the residential tax exemption in Watertown.
Thank you for your consideration in this matter.
cc: Steven Magoon, Community Development and Planning Director/Assistant Town Manager
Thomas J. Tracy, Town Auditor/Assistant Town Manager for Finance
Francis J. Golden, Chairman of the Board of Assessors
State Senator William Brownsberger
State Representative Jonathan Hecht
State Representative John Lawn
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Fisca l Year 2015 Tax Classification
November 25, 2014
Tax Rates and the Commercial Shift
The first step in setting the tax rate is to determine the tax levy or that amount of money that is to be
raised by real and personal property taxation.
FY 14 levy $ 82,692,980 Includes debt service
start FY 141evy halt___-_$ 82,314,930
+ 2.60% $ 2,057,873
+ New Growth $ 2,116,874
•--- -- -- -- -- --- - -- - - -- - - ----- --- -- ---
= FY 16 levy Ilmit $ 86,488,677
+ Debt Service $ 226,620
_Under Iev Ihnit $ 6 399 691 _ _ caused by rounding
inc
FY 16leV $ 86,708,897.31 Fisca'/201grease over
The second step in setting the tax rate is to determine what percentage share of the tax levy each class
of property will bear. For Watertown, there are essentially two property types or classes that
collectively raise the levy:
Residential
Conunercial/Industrial &Personal Property(CIP)
Very simply stated, the tax rate is determined by dividing the total amount of taxes (levy) to be raised
by the total taxable valuation of all real and personal property as determined by the Assessors.
For example: For Fiscal Year 2015 the Watertown tax levy of$86,708,897.31 divided by the total
value of all real and personal property of$5,444,172,323 yields a tax rate of $15.93 per thousand
dollars of valuation.
This calculation results in what is luiown as the flat or single tax rate. Massachusetts Law permits
cities and towns to classify property according to use or property type, and to establish separate tax
rates for the different classes. Historically, like many cities and towns, Watertown has chosen to split
or"shift"the flat rate into two rates; a residential rate and a commercial (CIP)rate. The shift in the tax
rates was originally intended to help alleviate rapidly rising residential tax rates by "shifting" more of
the tax burden onto the commercial(CIP)class,
Pagel
CALCULATING THE LEVY page
FY 14 levy $82,592,980 includes debt service
start FY 14 levy limit $8233145930
- Adjusted Growth $ -
+ 2.50% $250575873
+ New Growth $2,1155874
= FY 15 levy limit $869488,677
+ Debt Service $226,620
= FY 15 levy $86,7157297
FY15 levy by class $86,708,897.31 a 5.03% increase
under levy limit '$3.399.69) caused by rounding
t Mw�`�page 1
Total Tax Levy $ 86,708,897
v
e
Total Assessed value $ 5,444,172,323
Flat tax rate of $ 15.93
Tax shift of 175% — $ 27.87 CIP
$ 15.03 RES
Originally the law permitted the flat or single rate to be shifted by up to 150%. So the flat tax rate of
$15.93 per thousand could be as high as $23.90 for the CIP class resulting in a lower tax rate for the
residential class, Later in the 1980's the legislature amended the law to allow for a shift of up to 175%
and more recently In Fiscal Year 2004 the shift ceiling was placed at 200% with a sunset clause that
expired in Fiscal Year 2009.
Over a long period of time, residential property values have risen much more rapidly than commercial
property values and without these shifts, residential property owners would today be paying
considerably more in real estate taxes than they are today in towns like Watertown that have a split tax
rate.
Note: Certain suburban and rural towns have a Ihlyd split In the tax rate for"open space"which permits a lower tax rate for
vacant parcels (of which Watertown has very few) to help alleviate development pressure and preserve farniland and
woodlands.
The Watertown experience
Chart A on the following page shows the history of residential and commercial tax rates for the last
seventeen fiscal years and the corresponding shifts that were voted in those years,
During the late 1990's, the commercial shift continued to increase until it reached the 175% ceiling in
Fiscal Year 2002. Without these shifts, the average residential tax bill would have seen much bigger
increases. Soon after the ceiling was hit, you can see that residential tax bills suddenly jumped up
because shifting the commercial rate up was no longer an option.
Over the past year, residential values have begun to appreciate with revaluation Increases occurring in
most of our residential uses town wide. Tire primary assessment increases have occurred in residential
apartment buildings on Pleasant Street and Waltham Street. The town wide residential class
appreciated from calendar year 2013 into 2014, as a result of the progress associated with the ongoing
apartment developments. This appreciation within the residential apartment class (Use 112: 9 units or
greater)will continue to grow with the completion of Summer Street.
Commercial, Industrial and Personal Properly(CIP)values are stable town wide. The 2013 sales of the
Arsenal on tine Charles, Arsenal Mall and associated parcels have the Board of Assessors intrigued
with the firture development of that area. Commercial land values have increased due to the numerous
high sales prices that have occurred in the Arsenal market area. Personal Property new growth dropped
25%from $338,779 to $258,964 for FY 15. The drop in Personal Property new growth is attributed to
less new machinery coming on line. The Board of Assessors expects the Personal Property new growth
to return to more historic averages in next year's revaluation, The successful renovation of the old
Boston Biomedical site to Riverworks Watertown Holdings along Pleasant aid Bridge Streets alone
will bring much needed Personal Property growth for FYI 6. The vacancy dropped dramatically at this
site over calendar year 2014 as a result of Farley White's successful marketing and resale of the
properties fueling commercial growth with a variety of new tenants.
The impact of selecting different CIP shifts is displayed on Chart A on the following page.
CHART A RESIDENTIAL CIP COMMERICAL
Fiscal tax I tax average average exempt exempt tax tax bill tax average tax tax bill
Year shift rate assmnt tax dscnt amount bill change rate assmnt bill change
1998 1.60 15.13 $ 203,640 $ 3,081 10 $ 308 $ 2,773 3.36% 26.75 $ 783,300 $ 20,953 9.11%
H 1999 1.60 14.21 S 221,320 $ 3,145 10 $ 314 $ 2,830 2.07% 25.28 $ 880,200 $ 22,251 620%'
1 2000 1.64 13.39 $ 241,650 $ 3,236 10 $ 324 $ 2,912 2.89% 24.93 $ 1,010,500 S 25,192 1321%1
S 2001 1.66 11.93 $ 281,350 $ 3,357 10 $ 336 $ 3,021 3.73% 23.06 $ 1,240,000 S 28,594 13.51%1
T 2002 1.75 12.51 $ 299,600 $ 3,748 20 $ 750 $ 2,998 -0.74% 22.66 $ 1,331,200 $ 30,165 5.49%
O 2003 1.75 12.65 $ 315,900 S 3,996 20 $ 799 S 3,197 6.62% 22.68 $ 1,422,600 $ 32,265 6.96%1
R 2004 1.75 10.35 $ 426,456 $ 4,414 20 $ 883 $ 3,531 10.45% 19.90 $ 1,600,000 $ 31,840 -1.32%1
Y 2005 1.75 10.91 $ 452,069 $ 4,932 20 $ 986 S 3,946 11.740/a 20.09 $ 1,630,000 $ 32,747 4.18%i
2006 1.75 11.17 $ 455,372 $ 5,087 20 $ 1,017 $ 4,069 3.13% 20.35 $ 1,630,000 S 33,171 1.29%i
2007 1.75 10.45 $ 499,310 $ 5,218 20 $ 1,044 $ 4,174 2.58% 19.15 $ 1,825,600 $ 34,960 5.40%6
i
2008 1.75 11.39 S 466,647 $ 5,315 20 $ 1,063 $ 4,252 1.87% 21.01 S 1,825,600 $ 38,356 9.71%
2009 1.75 12.24 $ 443,666 $ 5,430 20 $ 1,086 $ 4,344 2.17% 22.54 $ 1,825,600 $ 41,149 728%
2010 1.75 13.31 $ 417,310 $ 5,554 20 $ 1,111 $ 4,444 2.28% 24.58 $ 1,734,300 $ 42,629 3.60%
2011 1.75 13.92 $ 407,408 $ 5,671 20 S 1,134 S 4,537 2.10% 25.87 $ 1,598,735 $ 41,359 -2.98%
2012 1.75 14.40 $ 410,554 $ 5,912 20 $ 1,182 $ 4,730 425%, 26.64 $ 1,564,500 $ 41,678 0.77%
2013 1.75 14.68 $ 420,841 $ 6,178 20 $ 1,236 S 4,942 4.500/a 27.15 $ 1,587,907 $ 43,112 3.44%,
2014 1.75 14.96 $ 427,057 $ 6,389 20 $ 1,278 $ 5,111 3.41% 27.96 $ 1,435,180 $ 40,128 -3.72%
2015 1.70 16.24 $ 451,638 $ 6,883 20 $ 1,377 $ 5,506 7.74% 27.08 $ 1,503,337 $ 40,710 1.45%
2015 1.75 15.58 $ 451,638 $ 7,037 25 $ 1,759 $ 5,277 3.255% 27.87 $ 1,503,337 $ 41,898 4.41% pg 1
2015 1.75 15.03 $ 461,638 $ 6,788 20 $ 1,358 $ 5,430 625% 27.87 $ 1,503,337 $ 41,898 4.41% pg 9
Page 3
Page 4
The Residential )exemption
Thirteen municipalities in Massachusetts have adopted the Residential Exemption. This provision in
the law allows for a shift of the tax burden within tine residential class by granting a discount to owner
occupied properties. There are no age or income requirements. The only requirement is that the
property owner occupy the property on January I of the year preceding the benefit year. So to qualify
for the residential exemption for Fiscal Year 2015, the property must have been owned and occupied
by the applicant on or before January I of 2014.
The Residential Exemption discount is voted on each year by the Town Council and it can range
anywhere between 1% to 30% of the average residential property assessment. Like the commercial
shift, there is no loss of tax revenue for the town, but instead the tax burden is shifted from one group
of taxpayers to another. Qualifying residential properties receive a tax decrease while non-qualifying
residential taxpayers receive a tax increase.
In order to increase the Residential Exemption discount beyond the historical 20%, the Town Council
would need to take a vote for a home rule petition. If passed our state representatives would need to
contact the Department of Revenue to bring this before the State legislature. If approved by the
Commonwealth the option could be considered for Fiscal Year 2016.
For example: If the total value of all residential properly is 750 million with a tax rate of$10. per
thousand, the residential class raises 7.5 million dollars in property tax revenue. Now if the average
residential property is assessed for$100,000 and receives a 20% discount, the new taxable assessment
becomes$80,000. This discount when applied to many qualifying properties has the effect of lowering
the total assessed value of the residential property class. The same amount of tax revenue must still be
collected, so now a total residential property value of 675 million must raise 7.5 million dollars and tine
result is an adjusted residential tax rate of$11.11 per thousand.
So the qualifying property assessed for $100,000 would be discounted to $80,000 and pay $888.88 in
taxes(a savings of$111.11) while a non qualifying property assessed for$100,000 will pay$1,111 (an
increase of$111.11).
The chart on the previous page (Chart A) shows the history of the Watertown residential exemption
discount over the last sixteen years. As the average residential assessment increased over time, the
exemption amount also increased, giving a greater benefit to the owner occupied qualified properties
and exacting higher taxes from non-qualifying properties. With recent declines in residential values,
the dollar benefit has continued to increase because the residential tax rate has Increased.
For Fiscal Year 2015 the Assessors are projecting 6,058 qualifying properties. Because the total tax
collected from the residential class must remain the same, this has the effect of driving up the
residential tax rate from .a projected $13.17 per thousand with no exemption to $15.03 utilizing the
historic 20%exemption discount and a CIP shift of 175%(Chart B on page 5).
Fiscal Year 2016 Residential Exemption
(For owner occupied properties)
(SHIFT 1.76 Projected Tax*Rates �C.ART13 I page s
71317 S 13.60 $ 14.04 $ 14.62 $ 16.03 $ 16.68 $ 16.17
Discount% 0% 6% 10% 16% 20% 26% 30% _ uon 11011
Exemption Exemption Exemption Exemption Exempllon Exemption Exemption qualifying qualifying
value credit 0 $ 22.582 $ 46,164 $ 67,746 $ 00.320 $ 112,910 $ 136,491 property property
lax credit 0 $ 307 $ 634 $ 984 $ 1.358 $ 1.769 $ 2191 at 20%factor at 26%factor
Assessment taxes taxes taxes taxes taxes taxes taxes 1 taxes taxes
$ 100,000 I $ 1,317 S 1,062 $ 770 $ 408 $ 146 $ $ • I$ 1,603 $ 1,658
$ 160,000 $ 1.076 $ 1,732 $ 1.472 $ 1.194 $ 097 $ 678 S 2361$ 2,265 $ 2,337
low $ 200.000 I $ 2.634 $ 2,411 $ 2,174 I $ 1.920 $ 4.648 S 1.367 $ 1,043 I$ 3.006 S 3.116
$ 260,000 I $ 3.293 $ 3.091 $ 2,876 I $ 2,646 $ 2,400 $ 2,136 I$ 1.862 $ 3,768 $ 31896
$ 300,000 I $ 31961 I $ 3.770 $ 3.678 I $ 3,372 S 3.161 I $ 2.916 I$ 2.660 $ 4.609 $ 4,674
$ 360.000 I $ 4,610 I $ 4.460 $ 4,280 $ 4,098 I$ 3.903 I $ 3.094 I $ 3.469 $ 5,261 $ 6,463
$ 400,000 I $ 6,268 I $ 6,129 I $ 4,982 $ 4.824 I $ 4,664 I $ 4,473 I $ 4,277 $ 6,012 $ 6,232
$ 460,000 I $ 6,027 I $ 6,809 I $ 6,684 I $ 6,660 I $ 6,406 $ 5,252 I $ 6.086 $ 6,764 $ 7,011
avm S 461.638 I $ 6,948 I $ 6,831 $ 6,707 I $ 6,674 I$ 6.430 $ 6,277 $ 6,112 $ 6.788 $ 7,037
$ 600,000 I $ 6.686 I S 6.488 $ G.386 I $ 6,276 $ 6.187 I$ 0.031 $ 6.694 $ 7,616 $ 7,790
$ 650,000 I $ 7,244 I $ 7.168 $ 7.088 I $ 7.002 I$ 6.909 I $ 6,610 I $ 6,703 $ 8,267 I $ 8,669
$ 600,000 I $ 7,902 I $ 7.847 $ 7.700 I$ 7.728 I $ 7,660 I $ 7.689 I $ 7.611 $ 9,018 I$ 9,348
$ 66%000 I $ 8.661 I $ 8,627 I$ 8.492 I $ 8.464 I $ 8.412 I $ 8,368 $ 8,320 $ 9.770 I$ 10,127
$ 700.000 I $ 9.219 I $ 9,206 I $ 9,194 I $ 0.180 I $ 9,163 I$ 9,147 I$ 9.128 $ 10,621 I$ 10,906
With I$ 760,000 I$ 9.878 I $ 0.886 I $ 9.890 I $ 9.906 1$ 0.9161$ 9.026 I$ 9.9371$ 11,273 I$ 11,686
$ 800.000 I S 10.636 S 10.665 I $ 10.698 I S 10.0321 $ 10.666 I $ 10,7051 $ 110,7461$ 12,024 I $ 12,464
$ 860,000 I $ 11.196 $ 11.246 I $ 11,300 I$ 11.368 I $ 11.418 I $ 11.484 I $ 11.6541$ 12,776 I$ 13.243
$ 900,000 I $ 11.853 I $ 11.024 I $ 12,002 I$ 12.084 I $ 12,169 I $ 12,263 I$ 12.362I$ 13,627 I$ 14,022
$ 1,00D,000 I $ 13.170 I $ 13,283 I $ 13,406 I $ 13,636 I S 13,672 $ 13,621 I$ 13,979 1+$ 16,030 I$ 16.680
The residential exemption amount(value credit)is based on the average residential assessment(yellow)
multiplied by the chosen discount factorwhlch can range between 1 slid 30%
This value credit Is than subtracted from the assessed value of every qualifying property. The reduced
assessment Is Ilion mulllplod by the tax rate that results from the selected discount factor.
- Essentially,the residential exemption Is funded by the non-owner occuplod residential properties which are
taxed al the full assessed value with no value credit.
- As the property Assessment Increases,the lax savings from the exemption d1ndidshes to a point where Itlgh
value properties actually pay moro with file residential exemption In place than without it(pink shaded area).
I Who is receivingthe bewat of file Residential$:ennpOei7 I
type total ft exempt percent
single fait. 2003 2375 81.8%
condos 3426 2069 60.4%
2 faintly 2701 1448 51.9%
3 family 383 129 33.7%
slits 4.8 fill] 132 10 7.6%
other 159 27 17.0°%
Itotals 9794 6068 61.9%
Page 6
Page 6
Conununity Comparison
When considering the impact of tax rates and shifts, it is useftil to look beyond our borders to discover
how nearby communities are dealing with similar issues. Chart C on the following page provides a
view of the tax structure of other nearby cities and towns. Some of our neighbors have split tax rates
while others do not. Generally, the smaller the conlmercial/industrial and personal property (CIP)
share is of the total assessed value, the less benefit there is to shifting the tax rate. Arlington and
Belmont both have very low CIP shares while Boston and Cambridge have high CIP shares. Boston
and Cambridge also offer a larger residential exemption percentage which coupled with large
commercial tax bases, serves to push down the average residential tax bill. While Newton does have a
commercial shift, they have chosen not to utilize the residential exemption and consequently the
average residential tax bill is very high. Waltham, which is most similar to Watertown in its socio-
economic structure, has a mulch larger cormmercial tax base which results in a lower residential tax rate
and like Watertown they also have utilized a 20%residential exemption discount in the past.
Taxpayers often cite that other nearby cities and towns have lower tax rates but they fail to realize that
the average residential assessments in those municipalities may be considerably higher. Just looking at
the tax rate in Newton for example, a taxpayer might conclude that taxes are lower there than in
Watertown. But with a much higher average assessed value, taxes in Newton are in fact Hutch higher.
While it is true that more affluent cities and towns have many more high end properties which tend to
drag tip the average, it is also safe to say that the typical dome in Watertown would be considerably
more valuable were it placed in Newton or Belmont and conversely, somewhat less valuable if placed
ill Walthalll.
Chart C COMMUNITY COMPARISON
For Fiscal Year 2014
FISCAL YEAR 2014
RES ; COMM; share of valueI I AVE RES AVE
TAX TAX S MUNICIPALITY' RATE RATE C/oP JSHIFT SHIF1'JSH(FT SHIFTtSHIFfSHIFfFY 2015 aEMP'SEA NGS TAX
ARLINGTON :$13.79 ;$13.79 :93.87: 6.13 ; 1.00 ? 1.001 1.00 : 1.00 1.00 1.00 ; $481,487 ; no I $- ; $ 6,640
BELMONT $13.50 :$13.50 i 94.37! 5.63 i 1.00 1.00 1.00 1.00 1.00 1.00 $782,700 i no $ ; $ 10,566
BOSTON $12.58 :$31.18 :64.65:35.35: 1.75 1.75 1.75 ; 1.75 : 1.75 ; 1.75 : $467,366 30% $ 1,764 : $ 4,116
CAMBRIDGE $8..38 :$20.44 :6127:38.72? 1.683?1.694? 1.693: 1.697? 1.710:1.689: $718,830 ? 30% : $ 1,807 ? $ 4,217
NEWTON :$12.12 :$23.18 :89.15:10.85: 1.75 : 1.75 1.75 1.71 1.74 1.74 : $713,466 : no $ : $ 8,647
WALTHAM :$13.43 :$31.97 166.36:33.64: 1.749: 1.75 ; 1.751 1.75 ; 1.75 1.75 ; $391,593 ; 20% ; $ 1,052 ; $ 4,207
WATERTOWN : $1496 :$27.96 :8125:18.75: 1.75 : 1.75 : 1.75 : 1.75 : 1.75 : 1.75 : $427,057 : 20% : $ 1 278 $ 5,111
Page 7
TOWN OF WATERTOWN
EXAMPLES OF RESIDENTIAL TAX INCREASES FOR FY 2015
WI-1 4 THE AVERAGE CHANGE IN ASSESSMENT VALUE BY USE FROM FY 2014,
14 F OWNER OCCUPIED AND B1AASED U��P��pO1�jN A 20%RESIDEN]TIAL EXEMPTION
201lSIGLE rLy HOME 201410'yOtt fr", 17 % -A 7W'F2 Y�M�/. 2b ? jFY'iO % TERIGE?r1j7iE
ASSESSMENT S 450,868 S 466,705 3.51% S 296,522 S 317,668 7.13°4 S 488,101 S SOZ697 2.999/ S 530,006 S 540,099 1.90% S 412,43� S 426.504 3.41%
RES EXEMP S 85.411 S 90.328 S 85,411 $ 90,32E S 85.411 S 90.328 S 85.411 S 90.328 S $5.411 $ 90.328
MINUS EXEMP S 365.457 3 376,377 2.99% S 211,111 S 227,340 7.69"/. S 40Z690 S 41Z369 2.40% $ 444,595 $449.771 mv6. S 327.021 S 336,176 230%
RATE S 14.96 15.OG 0.47% $ 14.96 15.03 0.4 k S 14.96 15.03 0.47/. S 14.96 IS.C3 0.47% S 14,96 15.03 0.47%
TAXES S 5.467.24 S 5.656.95 347% S 3.158.22 S 3.416.92 8.19% S 6.02424 S 6.197.91 2.88% S 6.651.14 S 6.760.06 1.64% S 4,89223 S 5.052.73 3.23%
TAX INCREASE S 189.71 S 258.70 S 173.66 S 108.92 S 160.49
IN DOLLARS
THIS VISUAL REPRESENTS 9,503 OR I00%OF OUR RESIDENTIAL TAX PAYERS WHO LIVE IN SINGLE FAMILY,TWO FAMILY,THREE FAMILY,OR CONDOMINIUM STYLE HOMES
AN NCREASE WOULD BE DUE TO AN IMPROVEMENT IN YOUR PROPERTY OR A REVALUATION ADJUSTMENT WITHIN YOUR SPECIFIC NEIGHBORHOOD
AN IMPROVEMENT IN YOUR PROPERTY WOULD BE SPECIFIC TO A PERMIT FILED WITH THE BUILDING INSPECTOR AND COLLECTED BY THE ASSESSORS OFFICE
A REVALUATION ADJUSTMENT WOULD BE DUE TO MARKET APPRECIATION WITHIN YOUR SPECIFIC NEIGHBORHOOD
S423.600 IS THE MEDIAN RESIDENTIAL VALUE FOR USES 101,102,104,AND 105 FOR FY 15
$426,503 IS THE AVERAGE RESIDENTIAL VALUE FOR USES 101,10Z,104.AND 105 FOR FY15
VALUE CONSTANT EXAMPLES:ZS%OFT HE RESIDENTIAL 101,102,104,AND 105.
Z401 OR 2S/.OF OUR RESIDENTIAL TAXPAYERS WITHIN THESE FOUR STYLES EXPERIENCED NO INCREASE IN VALUE FOR FY 15(sc cba,,bcbw)
2014 2015 % 2014 2015 % 2014 2015 %
ASSESSMENT S 300.000 $ 300.000 0.mA S 426,503 S 426.503 0.00% S 750.000 S 750.000 0.00%
RES EXEMP S 85,411 S 90,32S S 35.411 S 90.32S S 85,411 S 90.328
MINUS EXEMP $214.589 S 209,672 -2.291/. S 341,092 S 336,175 -1.44% S 664,589 S 659.672 -0.74%
S 14.96 15.03 0.47% S 14.96 15.03 0.47-A S 14.96 15.03 0.47%
TAXES S321025 S 3.151.37 -1.831h S 5.102.74 S 5,052.71 -0.98% S 9.94225 S9.914.87 -0.28%
TAX INCREASE S (58.88) S (50.03) S (27.38)
ESTIMATED FISCAL YEAR 2015 RESIDENTIAL TAX INCREASE page 9
(at a CIP shift of 1.75% and a residential exemption 20%)
97%AVERAGE OF THE USES
FISCAL YEAR 2014 AVERAGE TAX BILL * $ 5,111 $ 4,892 14.96 tax rate
FISCAL YEAR 2015 AVERAGE T AX BILL (EST) ** $ 5,430 $ 5,053 15.03 tax rate
ESTIMATED AVERAGE DOLLAR INCREASE $ 319 $ 161
ESTIMATED AVERAGE PERCENTAGE INCREASE 6.25% 3.28%
* Based on a FY2014 average residential assessment of$427,057 and receiving
an estimated residential exemption of$85,411 in value(20%) and$1,277.75 in taxes
*' Based on a iY2015 average residential assessment of$451,638 and receiving
an estimated residential exemption of$90,328 in value(20%)and$1,357.63 in taxes
FOR NON OWNER OCCUPIED PROPERTY
FISCAL YEAR 2014 AVERAGE TAX BILL $ 6,389
FISCAL YEAR 2015 AVERAGE TAX BILL $ 6,788
EST 1MA i tD AVERAGE DOLLAR INCREASE $ 399
ESTIMATED AVERAGE PERCENTAGE INCREASE 6.25%
ESTIMATED FISCAL l EAI2 L015 COMMERCIAL TAX INCREASL
(at a CIP shift of 1.75%)
FISCAL YEAR 2014 AVERAGE TAX BILL * $ 40,128 27.96 tax rate
FISCAL YEAR 2015 AVERAGE TAX BILL (EST) ** $ 41,898 27.87 tax rate
ESTIMATED AVERAGE DOLLAR INCREASE $ 1,770
ESTIMATED AVERAGE PERCENTAGE INCREASE 4.41%
* based on an average assessment in fiscal 2014 of$1,435,130
based on an average assessment in fiscal 2015 of$1,503,337
ESTIMATED FISCAL YEAR 2015 RESIDENTIAL TAX INCREASE page 10
(at a CIP shift of 1 .75% and a residential exemption 25%)
97%AVERAGE OF THE USES
FISCAL YEAR 2014 AVERAGE TAX BILL* $ 5,111 $ 4,892 14.96 fax rate
FISCAL YEAR 2015 AVERAGE TAX BILL (EST) ** $ 5,277 $ 4,886 15.58 fax rate
ESTIMATED AVERAGE DOLLAR INCREASE $ 166 $ (6)
ESTIMATED AVERAGE PERCENTAGE INCREASE 3.25% -0.13%
* Based on a FY2014 average residential assessment of$427,057 and receiving
an estimated residential exemption of$85,411 in value (20%) and $1,277.75 in taxes
*" Based on a FY2015 average residential assessment of$451,638 and receiving
an estimated residential exemption of$112,910 in value (25%) and $1,759 in taxes
FOR NON OWNER OCCUPIED PROPERTY
FISCAL YEAR 2014 AVERAGE TAX BILL $ 6,389
FISCAL YEAR 2015 AVERAGE TAX BILL $ 7,037
ESTIMATED AVERAGE DOLLAR INCREASE $ 648
ESTIMATED AVERAGE PERCENTAGE INCREASE 10.13%
sTlnna7EC�.�1 t AL V XIk2 zU1� t,vNl�n LIAL TM Cktk
(at a CIP shift of 1.75%)
FISCAL YEAR 2014 AVERAGE TAX BILL* $ 40,128 27.96 tax Pate
FISCAL YEAR 2014 AVERAGE TAX BILL (EST) " $ 41,898 27.87 tax rate
ESTIMATED AVERAGE DOLLAR INCREASE $ 1,770
ESTIMATED AVERAGE PERCENTAGE INCREASE 4.41%
* based on an average assessment in fiscal 2014 of$1,435,180
based on an average assessment in fiscal 2015 of $1,503,337
i
Page 4
The Residential Exemption
Thirteen municipalities in Massachusetts have adopted the Residential Exemption. This provision in
the law allows for a shift of the tax burden within the residential class by granting a discount to owner
occupied properties. There are no age or income requirements. The only requirement is that the
property owner occupy the property on January 1 of the year preceding the benefit year. So to qualify
for the residential exemption for Fiscal Year 2015, the property must have been owned and occupied
by the applicant on or before January 1 of 2014.
The Residential Exemption discount is voted on each year by the Town Council and it can range
anywhere between 1% to 30% of the average residential property assessment. Like the commercial
shift, there is no loss of tax revenue for the town, but instead the tax burden is shifted from one group
of taxpayers to another. Qualifying residential properties receive a tax decrease while non-qualifying
residential taxpayers receive a tax increase.
In order to increase the Residential Exemption discount beyond the historical 20%, the Town Council
would need to take a vote for a home rule petition. If passed our state representatives would need to
contact the Department of Revenue to bring this before the State legislature. If approved by the
Commonwealth the option could be considered for Fiscal Year 2016.
For example: If the total value of all residential property is 750 million with a tax rate of$10. per
thousand, the residential class raises 7.5 million dollars in property tax revenue. Now if the average
residential property is assessed for$100,000 and receives a 20% discount, the new taxable assessment
becomes $80,000. This discount when applied to many qualifying properties has the effect of lowering
the total assessed value of the residential property class. The same amount of tax revenue must still be
collected, so now a total residential property value of 675 nullion must raise 7.5 million dollars and the
result is an adjusted residential tax rate of$11.11 per thousand.
So the qualifying property assessed for$100,000 would be discounted to $80,000 and pay $888.88 in
taxes (a savings of$111.11)while a non qualifying property assessed for$100,000 will pay$1,111 (an
increase of$111.11).
The chart on the previous page (Chart A) shows the history of the Watertown residential exemption
discount over the last sixteen years. As the average residential assessment increased over time, the
exemption amount also increased, giving a greater benefit to the owner occupied qualified properties
and exacting higher taxes from non-qualifying properties. With recent declines in residential values,
the dollar benefit has continued to increase because the residential tax rate has increased.
For Fiscal Year 2015 the Assessors are projecting 6,058 qualifying properties. Because the total tax
collected from the residential class must remain the same, this has the effect of driving up the
residential tax rate from a projected $13.17 per thousand with no exemption to $15.03 utilizing the
historic 20%exemption discount and a CIP shift of 175% (Chart B on page 5).
Excerpt from November 25, 2014 Town Council Minutes
a)Public hearing and vote on a proposed Order allocating the property tax levy among or
between property classes for Fiscal Year 2015. Town Assessor—Francis Golden, provided a
power point presentation. Following the presentation,the Chair opened up the hearing to the
public. There being no comments, the hearing was closed.
Councilor Woodland stated that he appreciates the thorough presentation and noted that we are
very fortunate for the booming real estate market in Watertown.
Councilor Piccirilli stated that he appreciates the page 8 charts describing the different valuations
and property classes. He noted that the residential tax exemption is a fabulous thing along with
all the new growth. He indicated his surprise and disappointment to hear that the new assisted
living facility on Summer Street will be taxed at the residential class rate.
Councilor Kounelis indicated that residents are house poor and that we should shift the burden to
the 48% absentee landlords.
Councilor Palomba thanked Mr. Golden for the informative presentation.
Councilor Dushku thanked Mr. Golden for the presentation and for the information on small
business tax breaks. Mr. Golden reiterated that it is premature at this point to enact tax breaks for
small businesses as he needs to compile a more detailed spreadsheet.
Councilor Dushku noted that he agrees with Councilor Kounelis and supports a shift to absentee
landlords.
The Manager spoke for the need for a Home Rule petition to go beyond the 20%if Watertown
decides to do that in 2016.
.---� The Chair asked Mr. Golden to bring back something to the Town Council for discussion.
Councilor Lenk thanked Mr. Golden noting that she looks forward to the additional information
to increase the exemption for 2016.
Vice President Corbett noted that he is not opposed to increasing flexibility but indicated that the
increase will be passed onto renters and we have to be careful.
Councilor Kounelis noted that a 25% shift to non- owner occupied property will not be a severe
impact.
Councilor Piccirilli moved the 175% CIP shift/20% exemption, seconded by Councilor
Woodland and adopted by a roll call vote of 8 for, 1 against with Councilors Aaron Dushku,
Susan G. Falkoff,Anthony Palomba, Cecilia Lenk, Vincent J. Piccirilli,Jr., Kenneth M.
Woodland, Vice President Stephen P. Corbett and Council President Mark S. Sideris in favor and
Angeline B. Kounelis voting against.
Excerpt from November 25, 2014 Town Council Minutes
b)Public hearing and vote on a proposed Order setting optional tax exemptions for Fiscal Year
2015. Councilor Kounelis recuscd herself and left the room for the presentation and vote. Mr.
Golden provided a brief overview of the Order. The Chair opened up the hearing to the public.
There being no comments, the hearing was closed.
Councilor Piccirilli moved the Order, seconded by Councilor Woodland and adopted by
unanimous roll call vote of 8 for, 0 against and 0 present with Councilors Aaron Dushku, Susan
G. Falkoff,Anthony Palomba, Cecilia Lenk, Vincent J. Piccirilli,Jr.,Kenneth M. Woodland,
Vice President Stephen P. Corbett and Council President Mark S. Sideris in favor.
Excerpt from December 9, 2014 Town Council Minutes
COMMUNICATIONS FROM THE TOWN MANAGER:
A discussion was held with Representative Hecht regarding the filing of a home rule petition in
order to have flexibility for a potential residential exemption above 20%.
Driscoll, Michael
From: Hecht,Jonathan - Rep. (HOU) <Jonathan.Hecht@mahouse.gov>
Sent: Monday, March 16, 2015 1:37 PM
To: Driscoll, Michael
Cc: Lawn,John - Rep. (HOU); Brownsberger, William (SEN); Feigenbaum, Samuel (HOU)
Subject: RE: residential exemption --home rule petition --special act
Attachments: Residential Tax Exemption Increase Draft to TM 16Mar2015.docx
Dear Michael,
Following up on our conversation Friday, attached is draft language of a home rule petition to increase the residential
property tax exemption in Watertown. It is based on the acts approved for Somerville in 2014 and Malden in 2011.
Depending on when the act is approved,the final section may or may not be necessary in order to make it applicable to
property taxes for FY16.
Let me know if you have questions or if there's anything else I can be doing at this point.
Best regards,
Jon
Jonathan Hecht
State Representative (Watertown/Cambridge) State House Room 22 Boston, MA 02133
617 722 2140
Jonathan.Hecht@mahouse.gov
-----Original Message-----
From: Driscoll, Michael [mailto:mdriscoll@watertown-ma.gov]
Sent: Wednesday, December 03, 2014 2:05 PM
To: Hecht,Jonathan - Rep. (HOU)
Subject: residential exemption--home rule petition--special act
Good afternoon Sir; hope and trust all is well with you.
When time permits, please call me @ 617-715-8617.
Thank you.
1
An Act Increasing the Exemption for Certain Residential Real Property in the
Town of Watertown
(DRAFT)
SECTION 1. Notwithstanding section 5C of chapter 59 of the General Laws or any other
general or special law to the contrary, with respect to each parcel of real property classified
as Class One, residential, in the town of Watertown as certified by the commissioner of
revenue to be assessing all local property at its full and fair cash valuation and, at the option
of the town manager and with the approval of the town council, there shall be an exemption
equal to not more than_per cent of the average assessed value of all Class One, residential,
parcels within the town; provided, however, that such an exemption shall be applied only to
the principal residence of the taxpayer as used by the taxpayer for income tax purposes. This
exemption shall be in addition to any exemptions allowable under section 5 of said chapter
59; provided, however that the taxable valuation of the property, after all allowable
exemptions, shall not be reduced to below 10 per cent of its full and fair cash valuation,
except through the applicability of section 8A of chapter 58 of the General Laws and clause
Eighteenth of said section 5 of said chapter 59. Where,under the provisions of said section
5 of said chapter 59, the exemption is based upon an amount of tax rather than on valuation,
the reduction of taxable valuation for the purposes of the preceding sentence shall be
computed by dividing the said amount of tax by the residential class tax rate of the town and
multiplying the result by $1,000, For the purposes of this paragraph, "parcel' shall mean a
unit of real property as defined by the board of assessors of the town in accordance with the
deed for such property and shall include a condominium unit.
SECTION 2. A taxpayer aggrieved by the failure to receive the residential exemption authorized
by this act may apply for such residential exemption to the board of assessors of the town of
Watertown in writing, on a form approved by said board,within 3 months after the date on
which the bill or notice of assessment was sent.
For the purposes of this act, a timely application filed under this section shall be treated
as a timely filed application pursuant to section 59 of chapter 59 of the General Laws.
SECTION 3. This act shall take effect as of and shall apply to taxes levied for fiscal years
beginning on or after
Bureau of Local Assessment
Informational Guideline Release (IGR) No. 00-403
October 2000
(Supersedes 93-402)
SMALL COMMERCIAL EXEMPTION
Chapter 159§§115-117 of the Acts of 2000
(Amending G.L. Ch.59§31 and Ch. 60§3A)
This Informational Guideline Release (IGR) informs local officials about recent
legislation that allows assessors to determine the eligibility of sole proprietorships and
partnerships for the small commercial exemption option under property tax
classification.
Topical Index Kev: Distribution:
Classification and Taxation by Use Assessors
Selectmen/Mayors
City/Town Councils
City Solicitors/Town Counsels
Informational Guideline Release (IGR) No. 00-403
October 2000
(Suversedes 93-402)
SMALL COMMERCIAL EXEMPTION
Chapter 159§§115-117 of the Acts of 2000
(Amending G.L. Ch.59§5I and Ch. 60§3A)
SUMMARY:
This legislation allows local assessors to establish the eligibility of sole
proprietorships and partnerships for the small commercial exemption, which is one of
the property tax classification options available to communities when setting the annual
property tax rate. Under that option, the Board of Selectmen or Mayor, with the
approval of the City Council, may exempt up to 10 percent of the value of Class Three,
Commercial, parcels occupied by qualifying small businesses. G.L. Ch. 59 §5I. The
assessors apply the exemption to reduce the taxable valuation of the property before
setting the tax rate,in the same manner the residential exemption option under G.L. Ch.
59 §5C is applied. The small commercial exemption lowers taxes on parcels occupied
by small businesses and shifts those taxes to other commercial and industrial taxpayers.
Eligible small businesses are defined as those having an average annual
employment of no more than ten persons at all locations during the prior calendar year.
If a business is a sole proprietorship or partnership, the assessors may now determine
eligibility. Previously, a sole proprietorship or partnership could not receive the
exemption unless the Department of Labor and Workforce Development (formerly
called the Department of Employment and Training) had certified that the business met
the employment criterion in the annual list provided to local assessors. G.L. Ch. 151A
§64A. hi many cases,however, otherwise eligible sole proprietorships and partnerships
do not appear on that list because they are not legally required to file the reports used
by the Department to determine annual average employment.
The legislation also requires that the amount of any exemption applied to a
parcel be shown on the tax bill. G.L. Ch. 60 §3A. In addition, eligible taxpayers will
now have three months after the tax bills are mailed to apply for the exemption if no
reduction was made in their assessed valuation. G.L. Ch. 59 §5I. The same deadline
governs applications for residential exemptions not appearing on the tax bill.
BUREAU OF LOCAL ASSESSMENT MARILYN H. BROWNE,CHIEF
-2-
GUIDELINES:
A. ANNUAL ADOPTION
The board of selectmen or mayor, with the approval of the city council, may
decide before the tax rate is set whether or not to grant a small commercial
exemption for the fiscal year. A small commercial exemption of up to 10 percent
of the valuation of eligible Class Three, Commercial, parcels may be adopted.
The small commercial exemption is in addition to the other local tax policy
options available under the property tax classification law. It may be granted
regardless of the residential factor selected and used with or without an open
space discount or a residential exemption.
B. EXEMPTION QUALIFICATIONS
To receive a small commercial exemption granted for the fiscal year, a Class
Three, Commercial, parcel must be occupied as of January 1 by a business with
an average annual emplovment of no more than 10 at all locations during the
previous calendar year, and have a valuation of less than$1,000,000.
1. Occuvancv
The commercial parcel must be occupied by an eligible business as of the
January 1 assessment date for the fiscal year the exemption is granted. It
does not have to be owned by the occupying business or any other eligible
business.
If a parcel has multiple commercial occupants or tenants, all occupants must
be eligible businesses. If a parcel is multiple use, such as a residential and
commercial property, all occupants of the commercial portion must be
eligible businesses.
2. Elieible Business
An eligible business must have an average annual employment of 10 or
fewer people during the calendar year before the January 1 assessment
date for the fiscal year the exemption is granted. Average employment is
determined for the business as a whole, not just at the location of the
parcel or other parcels within the community.
-3-
a. Certification by Department of Labor and Workforce Development
Businesses certified by the Director of the Department of Labor and
Workforce Development as having had an average annual
employment of ten or fewer people at all locations during the prior
calendar year qualify for the exemption. The Director will provide
the assessors with a list of eligible businesses each year by July 1.
G.L. Ch. 151A §64A.
The list of eligible businesses is not a public record. The assessors
and their staff may use the list for the sole purpose of administering
the small commercial exemption. Assessors or their staff who use
the list for other purposes or disclose any of the listed businesses to
people outside the assessors' office may be fined$100.
b. Determination by Assessors
If a sole proprietorship or partnership occupying the parcel on
January 1 does not appear on the certified list, the assessors may
determine whether it met the employment criterion for the
previous calendar year. In all other cases, however, the assessors
must rely exclusivelv on the Director's certification in determining
whether a business meets the employment criterion.
Assessors will mostly be determining eligibility for sole
proprietorships and partnerships that did not employ anyone other
than the proprietor or a partner for more than 13 weeks during the
previous calendar year. Sole proprietorships and partnerships that
employed any other person for longer than that period are required
to report to Division of Employment of Training, Department of
Labor and Workforce Development and, therefore, they should
appear on the certified list.
For purposes of consistency, assessors should calculate an average
annual employment figure for the business using the same method
as the Director. That method is as follows:
-4-
(1) Determine the total number of persons employed at all
locations who worked during or received pay for the payroll
period that includes the 12th of each month in the calendar
year. Do not inchtde proprietors and partners.
(2) Determine the total number of persons employed during
each three month quarter of that calendar year.
(3) Determine the average number of persons employed for
each quarter of that year by dividing the total from step (2)
by 3. Routtd the result dozan to the nearest whole number.
(4) Determine the average annual employment by adding the
four quarter averages from step (3) and dividing by 4.
Round the result dozan to the nearest whole number. This
number must eaua110 or below for the business to meet the
emplovment criterion.
3. Valuation Limit
The Class Three, Commercial, parcel must have a valuation of less than
$1,000,000 before application of the exemption. The exemption applies to
a specific parcel occupied by an eligible business,not an eligible business.
Therefore, if any particular eligible business occupies more than one
parcel under $1,000,000 in value, each parcel would qualify for the
exemption.
C. ASSESSED VALUATION AND TAX RATE
The assessors administer the small commercial exemption in the same manner as
the residential exemption, that is, applying it before tax billing and without an
application from the taxpayer. Unlike the residential exemption, however, the
small commercial exemption is based on a percentage of an eligible parcel's
valuation,rather than a fixed dollar amount. The assessors value all Class Three,
Commercial, properties at their full and fair cash value and use the total full and
fair cash value of the commercial class to compute the minimum residential
factor and to determine the levy allocation under classification. If a small
commercial exemption is granted, the assessors must then determine the eligible
parcels, reduce their valuation by the selected exemption percentage and use the
reduced taxable valuation of the commercial class to calculate the tax rate.
-5-
Any small commercial exemption granted is borne by other Class Three,
Commercial, and Class Four, Industrial, real property, but not by personal
property. The tax levy to be raised from commercial and industrial properties
remains the same,but use of the reduced valuation in setting the tax rate results
in a higher tax rate for the commercial and industrial classes than for personal
property. The attachment, "Impact of Small Commercial Exemption," shows how
adoption of the exemption affects the calculation of the tax rate.
D. OTHER EXEMPTIONS
The small commercial exemption may be applied to parcels that qualify for other
property tax exemptions under G.L. Ch. 59 §5. There is no minimum taxable
valuation as is the case with the residential exemption.
E. TAX BILLS
Tax bills for parcels that receive the small commercial exemption must show the
following amounts: (1) the total full and fair cash valuation, (2) the small
commercial exemption, and (3) the total taxable valuation to which the tax rate is
applied. Model tax bills issued annually already reflect these requirements.
F. EXEMPTION APPLICATIONS
An application for the small commercial exemption may be filed with the
assessors if the exemption is not applied to reduce the assessed valuation of a
qualified parcel. The application deadline is three months after the tax bills are
mailed.
The taxpayer should use the attached "Application for Small Commercial
Exemption' (State Tax Form 128 -51) to apply for the exemption. A regular
abatement application (State Tax Form 128) filed within the deadline will also
serve as an effective application. In that case, the assessors should then ask the
taxpayer to complete State Tax Form 128-51 or otherwise provide the information
needed to determine exemption eligibility.
IMPACT OF SMALL COMMERCIAL EXEMPTION
Tax Levy $ 5,000,000
Full and Fair Cash Valuation
Residential $ 150,000,000 75°% )
Open Space 10,000,000 5% ) (80%)
Commercial 20,000,000 10% )
Industrial 10,000,000 5% ) (20%)
Personal 10,000,000 5% )
TOTAL $ 200,000,000 100%
Eligible Class Three Parcels
Full and Fair Cash Value $ 5,000,000
Exemption Percentage 10%
Exempt Valuation $ 500,000
Taxable Assessed Valuation $ 4,500,000
EXAMPLE 1
COMMUNITY ADOPTS A RESIDENTIAL FACTOR OF 1
Tax Rate Computation Without a Small Commercial Exemption
Class Levy % LM Tax Rate
R&O 80% $4,000,000 $25.00 ($4,000,000=160,000,000)
CIP 20% 1,000,000 25.00 ( 1,000,000 = 40,000,000)
Tax Rate Computation With a Small Commercial Exemption
Class Lew % iLv-y Tax Rate
R&O 80% $4,000,000 $25.00 ($4,000,000+160,000,000)
C&-I 15% 750,000 25.42 ( 750,000+ 29,500,000)
P 5°% 250,000 25.00 ( 50,000+ 10,000,000)
Tax Impact on Eligible and Non-eligible Parcel
Full and Fair Cash Valuation$500,000
Without Exemution With Exemption
Eligible $12,500 $11,439
($500,000 x$25/1000) ($450,000 x$25.42/1000)
Non-eligible $12,500 $12,710
($500,000 x$25/1000) ($500,000 x$25.42/1000)
EXAMPLE 2
COMMUNITY ADOPTS A SHIFT OF 150% ON CIP
ADOPTS A RESIDENTIAL FACTOR OF .875
Tax Rate Computation Without a Small Commercial Exemption
Class Levy % Levy Tax Rate
R&O 70% $3,500,000 $21.88 ($3,500,000+160,000,000)
CIP 30% 1,500,000 37.50 ( 1,500,000 + 40,000,000)
Tax Rate Computation With a Small Commercial Exemption
Class Levy % if—vy Tax Rate
R&O 70.0% $3,500,000 $21.88 ($3,500,000+160,000,000)
C&I 22.5% 1,125,000 38.14 ( 1,125,000 29,500,000)
P 7.5% 375,000 37.50 ( 375,000= 10,000,000)
Tax Impact on Eligible and Non-eligible Parcel
Full and Fair Cash Valuation$500,000
Without Exemption With Exemption
Eligible $18,750 $17,163
($500,000 x$37.50/1000) ($450,000 x$38.14/1000)
Non-eligible $18,750 $19,070
($500,000 x$37.50/1000) ($500,000 x$38.14/1000)
State Tax Fomri28-5I The Commonwealth of Massachusetts Assessors Use Only
10/2000 Date Received
Application No.
Name of City or Town Parcel Id.
APPLICATION FOR SMALL COMMERCIAL EXEMPTION
FISCAL YEAR
General Laws Chapter 59§5I
THIS APPLICATION IS NOT OPEN TO PUBLIC INSPECTION
(See General Laws Chapter 59§60)
Return to: Board of Assessors
Must be filed with assessors within 3 months after actual
L J (not preliminary)tax bills are mailed for fiscal year.
INSTRUCTIONS:Complete BOTH sides of application. Please print or type.
A. TAXPAYER INFORMATION. Complete this section fully.
Name(s)of assessed owner:
Name(s)and status of applicant(if other than assessed owner)
❑ Subsequent owner(squired title after January 1)on
❑ Administrator/executor. ❑ Mortgagee.
❑ Lessee. ❑ Other. Specify.
Mailing address Telephone No. ( )
No. Street City/Town Zip Code
B. PROPERTY IDENTIFICATION. Complete using information as it appears on tax bill.
Tax bill no. Assessed valuation $
Location (StreetAddress)
Parcel identification no. (map-block-lot) Land area
DISPOSITION OF APPLICATION (ASSESSORS'USE ONLY)
Occupancy ❑ GRANTED ❑ Assessed tax $
Employment ❑ DENIED ❑ Exempted tax $
Valuation ❑ DEEMED DENIED ❑ Adjusted tax $
Board of Assessors
Date voted/Deemed denied
Certificate No.
Date Certificate/Notice sent
Date:
FILING THIS APPLICATION DOES NOT STAY THE COLLECTION OF YOURTAXES.
TO AVOID LOSS OF APPEAL RIGHTS OR ADDITION OF INTEREST AND COLLECTION CHARGES,THE TAX SHOULD BE PAID AS ASSESSED.
THIS FORM APPROVED BY THE COMMISSIONER OF REVENUE
C. OCCUPANCY. List in the schedulebelow all occupants of property(incVingapplicant)onJanuary 1. An inspection or documentationmay be
required to verify occupancy.
OCCUPANCY ON JANUARY 1,
Floor Occupant Use of Space
wanrurelrst on nttnenment in some jonunt ns neressary.
Are any of the occupants doing business as a sole proprietorship or partnership? Yes ❑ No ❑
IF NO,GO ON TO SECTION E
D. PERSONS EMPLOYED DURING PRECEDING CALENDAR YEAR. For each occupant doing business as a sole proprietorship or partnership,list
in the schedule below the number of persons employed at all locations who worked during or received pay for the payroll period that includes the
12�of each month during the preceding calendar year. Do not include proprietors or partners. Copies of payroll or other records may be required
to verify employment.
MONTHLY PAYROLLS DURING CALENDAR YEAR
Business Name Business Name
1/12 4/12 7/12 10/12 1/12 4/12 7/12 10/12
2/12 5/12 11/12 2/12 5/12 8/12 11/12
6/12 9/12 12/12 3/12 6/12 9/12 12/12
nuiesonntmanuenn18112
r some jornmt as n cessngj.
E. SIGNATURE. Sign hereto complete application
Subscribed Ink day of Under penalties of perjury.
Signature of applicant
If not an individual,signature of authorized officer
nue
( )
tprimorrypef rvame a 66 imej;'W'e
If signed by agent attach copy of written authorization to sign on behalf of taxpayer.
INFORMATION ABOUT SMALL COMMERCIAL EXEMPTION
WHO MAY FILE AN APPLICATION. You may file an application if your property meets all of the qualifications below on January 1 and any small
commercial exemption locally adopted for the fiscal year was not applied to your actual tax bill. Your property must:
• Be Class Three,Commercial,property.
• Be occupied solely by businesses with an average annual employment of 10 or under at all locations during the prior
calendar year. Assessors may determine annual employment for a sole proprietorship or partnership. For all other
businesses,they must rely solely on the determination of the Director of Labor and Workplace Development.
• Have an assessed valuation of$1,000,000 or less before the application of the exemption
WHEN AND WHERE APPLICATION MUST BE FILED. Yom application must be filed with the board of assessors within 3 months after the actual bills
were mailed for the fiscal year, whichever is later. THIS DEADLINE CANNOT BE EXTENDED OR WAIVED BY THE ASSESSORS FOR ANY
REASON. IF YOUR APPLICATION IS NOT TIMELY FILED,YOU LOSE ALL RIGHTS TO AN EXEMPTION AND THE ASSESSORS CANNOT BY
LAW GRANT YOU ONE. AN APPLICATION IS FILED WHEN RECEIVED BY THE ASSESSORS.
PAYMENT OF TAX. Filing an application does not stay the collection of your taxes. In some cases,you must pay the tax when due to appeal the
assessors disposition of your application. Failure to pay the tax when due may also subject you to interest charges and collection action To avoid any
loss of rights or additional charges,you should pay the tax as assessed. If an exemption is granted and you have already paid the entire year's tax as
exempted,you will receive a refund of any overpayment.
ASSESSORS DISPOSITION. Upon applying for an exemption,you may be required to provide the assessors with further information and supporting
documentation to establish your eligibility. The assessors have 3 months from the date your application is filed to act on it unless you agree in writing
before that period expires to extend it for a specific time. If the assessors do not act on your application within the original or extended period,it is
deemed denied. You will be notified in writing whether an exemption has been granted or denied.
APPEAL. You may appeal the disposition of your application. The disposition notice will provide you with further information about the appeal
procedure and deadline.