A reduction in property tax for homesteads in and around the taconite relief area. The taconite relief area is located on the Iron Range. The data includes the Taconite Homestead Credit and the Supplemental Taconite Homestead Credit.
The Taconite Homestead Credit applies to homesteads in the taconite relief area. The Supplemental Taconite Homestead Credit applies to homesteads in school districts near the taconite relief area. The calculation for both credits varies by the location of the homestead. The credit equals either:
57 percent of the property's tax, with a maximum of $289.80, or
66 percent of the property's tax, with a maximum of $315.10.
The Taconite Homestead Credit is funded by the taconite production tax, which is paid in lieu of certain property taxes. The Supplemental Taconite Homestead Credit is funded by the state general fund.
Tax base is the measure upon which property tax liability is determined. Local and state governments certify their levies each year, then the tax base for each levy determines the tax rate applied to all properties in the jurisdiction.
Tax Rate = Levy ÷ Tax Base
The tax base varies depending on the type of levy. Most levies in Minnesota use net tax capacity or referendum market value as the tax base.
The tax increment financing (TIF) levy refers to the TIF district tax which is collected for TIF purposes. This levy is equal to the TIF captured net tax capacity (TIF NTC) multiplied by the total local tax rate. This tax is not included in any of the other governmental subdivision levies.
Tax increment financing (TIF) is a method of financing real estate development costs to promote development, redevelopment, and housing and to remediate pollution and hazardous substances in project areas where it would not otherwise occur.
These project areas are usually broken into TIF districts for one of the development purposes. After development occurs, TIF uses the taxes generated off the portion of increased market value to offset some of the costs of development.
The county auditor certifies the pre-development ""original"" net tax capacity and ""original tax rate"" for each TIF district. The ""captured"" tax capacity is the increased market value over the original net tax capacity as the district increases in value post-development. The increment is determined by multiplying the original tax rate by the captured net tax capacity.
Taxable market value (TMV) refers to the amount of value that is used in calculating taxes for a property. Due to a variety of special features in the property tax system, TMV may often differ from estimated market value (EMV). The list below summarizes the hierarchy of market value components, indicating how and where each factor comes into the calculations.
Market Value Irrespective of Contaminants
Estimated Market Value (EMV) [1-2]
Green Acres Deferral
Rural Preserve Deferral
Open Space Deferral
Aggregate Resource Preservation Deferral
Platted Vacant Land Exclusion
“This Old House” Exclusion
“This Old Business” Exclusion
Exclusion for Veterans with a Disability
Mold Damage Reduction
MV Prior to Homestead MV Exclusion [3-4-5-6-7-8-9-10-11-12]
Homestead Market Value Exclusion
Taxable Market Value (TMV) [13-14]
Generally speaking, calculation of TMV starts with EMV. If there is contamination value present, there is a theoretical market value irrespective of contaminants that would be higher. TMV is the foundation for computing net tax capacity (NTC) and referendum market value (RMV).
The total net tax capacity (NTC) is computed for each parcel of property according to the classification rates and the property’s taxable market value.
Total NTC = Taxable Market Value x Class Rate
The total net tax capacity is adjusted for property tax programs that have tax bases different than total net tax capacity, such as fiscal disparities and tax increment financing. The result is the taxable net tax capacity, which is the tax base for local net tax capacity levies. The formula for taxable net tax capacity is:
Taxable NTC = Total NTC - Power Line NTC - Fiscal Disparities Contribution NTC - TIF NTC +/- Adjustment NTC
Business property value deferral that was meant to encourage improvement of older business properties or business properties that were damaged in the major floods that occurred in 1997 or 2002. If any such improvement was made, the difference in the tax assessment was excluded for the next five years and then added back in 20 percent increments over the following five years.
The total average local net tax capacity (NTC) rate is the average property tax rate for all NTC levies in the jurisdiction. The rate is calculated by dividing all NTC levies in the jurisdiction (sum of county, city/town, school district, and special taxing district levies) by the total taxable NTC in the jurisdiction.
Total Average Local NTC Tax Rate = Total Local NTC Levies ÷ Taxable NTC
The total average local referendum market value (RMV) rate is the average property tax rate for all RMV levies in the jurisdiction. The rate is calculated by dividing all RMV levies in the jurisdiction (sum of county, city/town, school district, and special taxing district levies) by the total RMV in the jurisdiction.
Total Average Local RMV Tax Rate = Total Local RMV Levies ÷ RMV
The variation in property taxes is the result of Minnesota’s classified property tax system. Each class of property is assigned one or more class rates. The property’s taxable market value is multiplied by the class rates to determine the property’s tax base, called its net tax capacity (NTC).
Local NTC = Taxable Market Value x Class Rate
The total local NTC by class is the sum of the NTC of all properties in each classification in the selected jurisdiction.
There are two types of net tax capacity (NTC): local NTC and state NTC. The local NTC is the base for levies by local jurisdictions. Among levies by local jurisdictions, there are different NTC tax bases on which levies are applied. These include:
Power Line NTC
Fiscal Disparities Contribution NTC
Tax Increment Financing (TIF) NTC
Most local levies (county NTC levy, city/town NTC levy, school district NTC levy, and special taxing district NTC levy) use taxable NTC as the tax base. Specific-use levies (power line levy, fiscal disparities levy, TIF levy) each have their own tax base. Adjustment NTC is the adjustment for NTC changes between certifying levies and sending tax statements.
Amount of Energy Production Tax due based on the amount of total energy produced by either a solar energy generation system (SEGS) or wind energy conversion system (WECS) in the previous calendar year.