How are Education Taxes Calculated? Here are some examples
Happy Valley is at the 100% CLA rate; in other words, their appraisals are commensurate with property values and sales. The State has set a base spending rate per pupil at $8723 however Happy Valley plans to spend $12,000 per pupil. Residents are wondering how their tax bill is calculated. All have properties valued at $250,000 except for the last, valued at $600,000.
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Resident Description |
Concepts used to calculate |
Calculation |
| Isabel has a household income is $60,000. Her property is valued at $250,000 | Isabel qualifies for “income sensitivity” as her household income is below $90,000. | 12,000/8723 = 1.37571.3757 X 1.8% = 2.476%
2.476% X $60,000 = $1485.72
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| Harry and Henrietta Homestead have a household income of $120,000. His property is valued at $250,000 | Harry and Henrietta pay the full property tax based on the penny rate. | 12,000/8723 = 1.37571.3757 X .88 = 1.21
$250,000/100 X 1.21 = $3,025.00 $3,025.00 X 100% (CLA) = $3,025.00 |
| Freddy owns his home and makes $40,000. | Freddy’s taxes are also subject to “super circuit breaker,” meaning his combination of ed & mun. taxes cannot exceed 5% of his household income | 12,000/8723 = 1.37571.3757 X 1.8% = 2.476
2.476% X $40,000 = $990.40
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| Debbie is retired. She earns $40,000 of which $35,000 is from dividends. Her property value is $250,000 | Debbie’s dividend income is doubled, so income is calculated as $5,000 + $75,000. She loses the under $40,000 but still qualifies as under 90,000. | 12,000/8723 = 1.37571.3757 X 1.8% = 2.476%
$75,000 X 2.476% = $1,857.00 |
| Nancy non-resident owns and rents out a duplex valued at $250,000. Her income is $85,000. | Nancy pays the state-set non-resident rate. Her income is not relevant here. | $250,000/100 X 1.37 $3,425.00$3,425.00 X 100% (CLA) = $3,425.00 |
| Irvin inherited his house from his mother. His income is $75,000. Property is valued at $600,000. | Income sensitized property value is capped at 500,000.In all cases, no income sensitivity credit can exceed $8,000.If not income sensitized, Irwin would have paid $8,254.20. Since he is – credit would be $8,254.20- $3,067=$5187.20, which is below the 8,000. Therefore, he gets the full credit outlined in the next column. | 12,000/8723 = 1.37571.3757 X 1.8% = 2.476%
$75,000 X 2.476% = $1,857.00 Because he is over the $500,000 cap, he pays the penny rate on the remaining $100,000 of housesite value so 1.3757 X .88 = 1.21 $100,000/100 X 1.21 = $1,210.00 $1,210 X 100% (CLA) = $1,210.00 Total = $1,210 + $1,857 = $3,067 |