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Town Treasurers and Selectboards:



Many towns and cities are setting a local agreement rate for the first time this year having just voted to increase the veteran's exemption, or voted recreational property exempt, etc.  Several towns have had questions on how to go about setting that rate.  I thought others might also have questions.  You can find information on this in the Treasurers and Collectors Guidelines<http://www.state.vt.us/tax/pdf.word.excel/pvr/Treasurers%20Guidelines%20-%202010%20FY11.pdf> on the Tax Dept. website.  Here's the basics....



You determine how much education tax revenue was foregone as a result of the local agreement. You then levy the appropriate tax rate against the municipal grand list to raise that amount. Let's take an example.



Your voters have decided to stabilize the taxes on a business that is expanding in town. The selectboard has entered into an agreement with the owner to exempt $500,000 of the value for each of the next five years. That means 5,000 (500,000 * .01) is taken off the nonresidential education grand list.



In addition, voters have decided to increase the veteran's exemption to $40,000 from the automatic $10,000.   There are 10 such properties for a total increased reduction in homestead listed value of $300,000 (10 times $30,000). That's 3,000 off the homestead education grand list.



For the purposes of this example, the nonresidential education tax rate is $1.6027. The homestead education tax rate is $1.5503.    Let's say the total municipal grand list for your town is 1,020,000.



          Foregone education taxes are:           5,000 * $1.6027 = $8,013.50



                                                                   3,000 * 1.5503 =   $4,650.90



                                                                                                $12,664.40



You need to set a tax rate to be levied against the municipal grand list (1,020,000 in this example) to raise that $12,664.40.



                                                          $12,664.40  1,020,000 = $0.0124





The NEMRC website also has information on setting this rate.  You can go to:  http://www.nemrc.com/support/grandList/  and then click on Calculate Taxes.



Your listers or assessor can assist you with ascertaining the total foregone listed values in your town or city.



Feel free to contact me or the Property Valuation District Advisor for your area if you have questions or need assistance.



Thank you for your attention.



Mary Jane Grace, Program Technician
Property Valuation and Review Division
Vermont Dept. of Taxes
802-828-5863