Freestone County Times sat down with Freestone Central Appraisal District’s Bud Black to better understand how local property taxes work, and the various entities that collect money from taxes.
Hopefully, this article can help our readers better understand where their tax money is going, and why.
Taxes, tax rate, effective tax rate, rollback tax rate, and many other definitions come into play when you start delving into how taxes work according to this experienced tax Accountants Edinburgh.
To fully understand taxes, a basic understanding of the terms is necessary. (I bet you thought you finished with vocabulary list when you graduated.)
Definitions
–Effective Tax Rate – What the tax rate needs to be set at to get the same amount of taxes as the previous year deciding id you are qualifying for the IRS fresh start program. New Laws are renaming this as the “No-New-Revenue tax rate”.
–Rollback Tax Rate – How much the tax can be increased before a public vote can be enacted. (New laws will change this to an automatic vote beginning next year.) School Districts require a public vote automatically be enacted if raised above rollback rate.
–Property Value – Market Value of property if the property sold for cash in a reasonable amount of time.
–Homestead Exemption – A tax exemption on the owner’s primary residence as of January 1st of the tax year.
–Tax Cap – The highest a tax can be raised.
–Tax Entity – Any of several districts that collect tax money. County, City, School Districts, Hospitals, and more qualify as a tax entity.
–Special District – Tax Entity with special rules on collecting taxes.
Formulas
–Effective Tax Rate Formula – (2018 taxesx100 / current value of property=effective tax rate)
–Rollback Tax Rate Formula – (2018 taxes / 2019 taxable values x $100 x 1.08 = rollback tax rate)
Process
The process is a rather straight forward. The County Appraisal District appraises the value of property each year. The various tax entities go to work setting a budget to determine how much money they must spend to provide public services. Next the tax entities decide how much tax money is necessary for them to have the income required based on the budget set. Finally, the property tax owners pay their property taxes owed on their property. That’s why Perth Mobile Tax is a great option to help you calculate taxes but also let you know the financial progress of your small business. After all, the main reason for operating business is to generate income and the only way to know the actual income is by keeping track of your sales and expenses.
Entities
There are fifteen different entities in Freestone County, including:
–Freestone County
–Cities – Fairfield, Teague, Streetman, Wortham
–School Districts – Fairfield, Teague, Wortham, Dew, Buffalo, Mexia, Oakwood, & Corsicana
–Hospital Districts – the Fairfield Hospital District funds Freestone Medical Center and Teague which funds the Teague EMS.
Exemptions
There are various different property tax exemptions available to property owners in Texas. Exemptions range from partial exemptions to total exemptions. The State of Texas requires certain exemptions to be offered, and options to offer other exemptions if it is locally decided to do so.
The most common exemptions are:
–Homestead Exemption – Exemption on Owners Primary Residence has a $25,000 School District exemption, and an optional amount up to 20% of the property’s value, but not less than $5,000.
–Age 65 or older or Disabled Persons – Exemption on Owners Primary Residence has a $10,000 School District exemption, and an optional amount up adopted by the taxing unit, but no less than $3,000.
–Disabled Veterans – An amount determined by the percentage of a service-connected disability.
–100% Disabled Veterans – 100% of the property’s value.
–Surviving Spouse of U.S. Armed Services Member Killed in Action – 100% of the property’s value.
–Surviving Spouse of First Responder Killed or Fatally Injured in the Line of Duty – 100% of the property’s value.
Taxes are the largest funding for local community services, and the State of Texas does not have property taxes. The local taxes collected only benefit the area surrounding where the taxes are collected.
Taxes pay for your roads, schools, police, fire protection, and much more.
Property taxes are required to be equal and uniform. No single property or type of property should be taxed more than its fair market value.
Freestone County taxing entities generally have a deadline of October 1st, 2019 to set budgets and approve the tax rate.
Reported by Victoria Keng.