Frequently Asked Questions
PROPERTY ASSESSMENT
How is Property Assessment used in the Taxation of Property?
Assessed Value and the Tax Rate
The Assessor’s primary responsibility is to find the fair market value of your property, so that you and other taxpayers may contribute a fair share of support for the community services you receive. For these services to continue, other agencies, as well as the city, must levy taxes. The other taxing agencies include the Sheboygan Public Schools, Sheboygan County, and the Lakeshore Technical College. Here again, state laws define the powers of these taxing agencies and the kinds of properties that are exempt from taxes, such as schools, scout camps, and churches. Taxes levied by these other agencies are included in your tax bill with the taxes levied by the City of Sheboygan.
Each year the governing bodies of the various taxing agencies propose budgets for the next year. To finance the expenditures in the budget, they total all expected sources of revenue such as state aids and shared taxes, license fees and tuition. This is subtracted from the estimated expenditures. The remainder, which is the total amount to be collected through property taxes, is the called the “tax levy.” The amount of the tax levy for the City of Sheboygan depends on the size of the City budget, which is determined by the Common Council. The levy is raised by multiplying the value of all the property in the City by a percentage, called the tax rate. The rate is the same for all property owners. When this tax rate is applied to the value of all the taxable property in the city, it will total to the exact amount of money needed for the levy to help finance City expenses.
The tax rate is calculated by simply dividing the amount of taxes needed by the total assessed value of all taxable property in the City as follows: Tax Rate = Levy
Total Assessed Value
Once the rate is set, the assessed value of your property is used to determine your portion of the levy. The tax rate when multiplied by the assessed value of your property equals what you owe in taxes — your tax bill. The tax rate is often expressed in terms of dollars per thousand, or as a “mill rate.”
The entire taxation process requires the cooperation of several parts of City government. The Assessor sets the value of your property. The Mayor and Common Council determine the cost of City services, thereby establishing the tax rate necessary to generate funds for these services.
Differing with the Assessor’s Market Value Appraisal
If your opinion of the value of your property differs from the Assessor’s appraisal, by all means come in and discuss the matter with us. The personnel in the Assessor’s Office will be glad to discuss any questions you may have about our appraisal. If you have evidence that the appraisal is more than the actual fair market value of your property, we will welcome the opportunity to review all pertinent facts.
After talking with us, if you still find a significant difference between our appraisal and what you feel is your property’s market value, you may file a formal objection to your assessment. This objection must be filed with the Board of Review in writing.
PROPERTY TAX EXEMPTIONS
1. What Property Qualifies for Property Tax Exemptions?
The general rule is that all property in Wisconsin is taxable unless it is specifically exempt from tax by the state legislature. The legislature enacted state statute section 70.11 which lists about 40 categories of specific exemptions.
Statutes granting exemption are, according to the legislature and the courts, strictly construed against exemption and in favor of taxation. The property owner has the burden to prove entitlement to exemption and that it fits clearly within a precise statutory exemption category.
Typically, under the categories in state statute section 70.11, exemption is based on ownership of the property, use of the property or a combination of ownership and use.
Besides the exemption categories listed in state statute section 70.11, other exemption possibilities exist. For example, separate and additional categories of exempt personal property are listed in state statute section 70.111; and, under state statute section 70.112, property (such as property of a utility company) subject to a different form of tax, is typically exempt from property tax.
2. If we are a tax exempt organization for Federal income tax purposes (such as a 501(c)(3) Corporation), do we automatically qualify for property tax exemption?
No. Federal income tax exemption (such as 501(c)(3) status) does not guarantee property tax exemption. Income tax exemption is governed by federal law and Internal Revenue Code requirements. Property tax exemption is governed by separate state law concepts and requirements.
3. Can property be partially exempt?
Yes, under the right circumstances. Property used in part for exempt purposes and in part for an unrelated trade or business for which the owner is subject to income tax under the Internal Revenue Code may be partially taxed on that portion which is attributable to the unrelated trade or business. State statute section 70.1105 contains requirements for partial exemption. Besides the section 70.1105 requirements, owners
seeking partial exemption must be aware of the leasing and rent restrictions in section 70.11’s preamble.
4. If I think my property qualifies for property tax exemption what do I do? A Wisconsin Department of Revenue application form must be filed with the assessor for the locality in which the property is located. The application form may be obtained from the local assessor.
The form must be filed for any property that was taxed in the previous year but, because of a change in the use, occupancy or ownership, it may now qualify for exemption.
The application must be filed by March 1st of the year for which exemption is sought. Remember that the presumption is that property is taxable, and the owner seeking exemption has the burden to show that the property clearly qualifies for exemption.
The application must be completed in its entirety so that necessary information is provided to the assessor to allow for an informed decision. In certain cases, the assessor may require additional information. Insufficient information may result in denial of the application.
No application needs to be filed for certain property, such as municipal property, property of the state, and manufacturing machinery and equipment. You should check section 70.11 to see if an application is necessary for your organization and your property.
5. If my organziation purchases property that is exempt, do we need to apply for an exemption?
If a currently exempt property changes ownership the new owner needs to apply for exemption even if the owner has qualified in the past for exemption or the new owner thinks the property is exempt. The new owner needs to apply because the property is not automatically exempt even though it was exempt the previous year.
6. If my organization currently owns property that is exempt, does additional property acquired by my organization automatically qualify for exemption?
No. An organization acquiring additional property must apply with the local assessor by the March 1st deadline for exemption on that new property.
Exemption determinations are made annually. When use or ownership change so that property may qualify for exemption, an exemption application must be timely filed. Be aware that newly acquired property may cause an owner to exceed statutory acreage limitations on exemption.
7. If my organization does not own real estate, must I file an exemption aplication for its personal property?
Yes. The requirements of state statute section 70.11 apply to both real and personal property.
8. Is there a filing deadline?
Yes. Applications for exemption must be filed with the local assessor on or before March 1st of the year for which exemption is sought.
9. What if I miss the deadline?
March 1st is a statutory deadline that must be met to obtain the benefit of property tax exemption. If the deadline is missed, no exemption can be granted for that year.
10. Are there any other important dates?
Yes. Besides the March 1 exemption application deadline, January 1, March 15, and March 31 are important dates.
In Wisconsin, a property’s status (taxable or exempt) is determined as of January 1 of each year. Ownership and use as of that date is critical since there is no pro-ration of the tax if property is acquired or sold later in the year. For example, if an entity that would otherwise qualify for property tax exemption acquires its parcel on February 1, the first year it could possibly qualify for exemption under a section 70.11 category would be January 1 of the following year.
January 1 is also important because, even if an exemption has been granted for a given year, the assessor may review and even deny the exemption for the following year. The status of the property as of each new January 1 governs whether the property is entitled to exemption for that year.
As explained below, March 15 and March 31 are important dates because they are deadlines for owners of already-exempt property to file certain reports.
11. Who makes the exemption determination?
While the state legislature created the state statutes creating the exemption categories, the local assessor determines, on a case-by-case basis, whether an owner proved that its property fits within a category and whether the property is thus exempt.
12. Is the Assessor required to notify me of the determination?
In most cases, the assessor will notify the organization seeking exemption of the determination, but the assessor is not required to do so.
13. What if I disagree with the Assessor’s exemption determination?
The owner must follow the exclusive procedure set forth in state statute section 74.35. The local board of review does not have any authority regarding exemption issues.
14. If the exemption is granted, do I have further obligations?
Yes. Annually, by March 15th, any organization that owns property that is exempt under section 70.11 (except property of the state or municipality), and that was used in a trade or business for which the owner was subject to tax under sections 511 to 515 of the Internal Revenue Code, must file a report with the clerk of the taxation district detailing the activities and a description of the property used in the trade or business (section 70.339). The report form is prescribed by the Department of Revenue and available from the local municipality.
By March 31st of each even-numbered year, owners of property exempt under section 70.11, must file a report with the clerk of the taxation district describing the property, giving the owner’s estimate of its fair market value, and indicating if the property was leased in the preceding two years (section 70.337). This report form is also prescribed by the Department of Revenue and available from the local municipality.
All rights reserved. Copyright© 1998 by Wisconsin Association of Assessing Officers
REVALUATIONS
What is revaluation?
A revaluation is a complete and thorough review of all assessments. During a revaluation all assessments are examined and adjustments are made where necessary to guarantee that all property is assessed at market value. This is done to assure that taxes are distributed fairly (uniformly) and equitably. Can the assessment on my property be changed even if the assessor has not been inside my property? To make a proper assessment on a building, it is desirable for the assessor to see the inside and the outside of the property. The law requires that property be valued from actual view or the best information available. The assessor keeps records on the physical characteristics of each property in the municipality. Even though the assessor may have been unable to go through your property, the assessment will still be reviewed, based on the existing records and the sales of similar properties. I have recently built a new home. Will the construction costs be considered? Your construction cost is an historical figure, which may or may not reflect the current market value of your property. It is only one element that will be considered.
What will happen to my assessment if I improve my property? Generally speaking, improvements that increase the market value of a property will increase the assessed value. The following are typical items that will increase the assessed value of your property:
a. Added rooms or garages
b. Replacing older siding with aluminum or vinyl siding
c. Substantial modernization of kitchens or baths
d. Central air conditioning
e. Fireplaces
f. Extensive remodeling
Will my assessment go up if I repair my property? Good maintenance will help retain the market value of your property. Generally, your assessment will not be increased for individual minor repairs such as those that follow; however, a combination of several of these items could result in an increased assessment.
a. Repairing concrete walks and driveways
b. Replacing gutters and downspouts
c. Replacing water heater
d. Repairing or replacing roof
e. Repairing porches and steps
f. Repairing original siding
g. Patching or repairing interior walls and ceilings
h. Exterior painting
i. Replacing electrical fixtures
j. Replacing furnace
k. Exterior awnings and shutters
l. Weather stripping, screens, storm windows, doors
m. Exterior landscaping including lawns, shrubbery, trees, flowers