Property taxation and property tax reform are perennial issues in West Virginia. Past attempts to modernize and rationalize the system generally have failed despite, or perhaps because of, the fact that West Virginia's property taxes are very low compared to most other states. This situation is symbolized by the Statewide Reappraisal Program of the mid-1980s. After spending some $35 million to revalue all real property on each county's tax rolls, West Virginia never implemented the new values.
In 1990 another attempt was made to rationalize and modernize property taxation in West Virginia. Legislation was approved that directs the county assessors to undertake a three year program to update real property appraisals to levels similar to those that would have resulted from implementing the Statewide Reappraisal Program. The legislation mandates that the impact of the reappraisals are to be revenue neutral, that is, after the reappraisals take place total tax collections are to remain at about the same level as they were before the reappraisals took place. The Statute, passed during the regular session of the Legislature, was modified during an August special session called to deal with educational issues. Further legislation may be expected during subsequent sessions of the state legislature.
This chapter provides taxpayers, policymakers, and others with a framework for understanding and analyzing property taxation in West Virginia. It details the historical development of property taxation legislation in West Virginia, analyzes the impacts of the 1990 reform effort, and makes several recommendations for improving West Virginia's property taxation system. Although this chapter focuses on real estate taxes, personal property tax concerns are also discussed.
Property Taxes
Although property taxes produce some revenue for state governments and were used historically in a few instances by the Federal government, they are primarily used as a source of revenue by local government units. In concept, property taxes are applicable to all forms of wealth, tangible and intangible, personal and real estate, which are privately owned and have value. Most property tax jurisdictions levy taxes on both real and personal property, but there has been a tendency to move away from taxing intangible property such as money, bank accounts, stocks and bonds. Typically, property taxes are ad valorem, i.e., based on the value of the item being taxed. The tax the owner pays usually is a percentage of the property's value. However, they can be based on other factors, such as the physical amount of property owned. For example, the tax could be a fixed dollar amount per acre owned. It also might be based on the number of units owned. For example, the tax could be a fixed dollar amount per automobile or dog owned.
The History of Property Taxation in West Virginia
Property taxes in West Virginia are based on provisions of the Constitution of West Virginia, the Statutes passed by the state legislature for implementing the constitutional provisions, administrative procedures of the State Tax Commissioner and Board of Public Works, and legal interpretations of State Laws by state and federal courts, including the U.S. Supreme Court. They also are affected very strongly by customs and practices of West Virginia's 55 county tax assessors and other county officials.
Constitutional Provisions
The current structure of West Virginia's property taxes is based to a large degree on the 1932 Tax Limitation Amendment to the Constitution of West Virginia. Although many states have tax limitation amendments, the West Virginia provision is somewhat unique in its approach. The Amendment was passed during the Great Depression of the 1930s when continued high property taxes were causing economic hardship and tax defaults. It severely restricted the amount of property taxes by categorizing all property into four classes with maximum tax rates for each class. Class I is personal property used in agriculture and intangibles and has a maximum rate of 50 cents per $100 value. Class II is farm real estate and owner occupied residences with a maximum tax rate of one dollar per $100 valuation. Class III is all other property located outside of municipalities with a maximum rate of $1.50 per $100 of value. Class IV is all other property located within municipalities with a maximum rate of $2.00 per $100 value.
The 1932 Tax Limitation Amendment also allowed three year excess levies of up to 50 percent of the basic rates for counties, municipalities and schools if 60 percent of the voters in those jurisdictions approved. In addition, it allowed counties, municipalities and schools to pass bond issues, to be paid for by taxes in excess of the basic levy rate, if 60 percent of those voting on the bond proposal approved. The amount of the bonds is limited to 5 percent of the total assessed value during the year preceding the bond issue. As will be discussed later in this chapter, the excess levies and bond provisions for schools have been modified in recent years.
Over the years various amendments have been adopted exempting various types of property from ad valorem taxation. In 1957 some forms of intangible property were exempted and the legislature was provided authority to enact exemptions on other forms of intangible property as well. In 1972 household goods and personal effects not held for profit were exempted and in 1984 the exemptions for intangibles were further clarified. To promote employment through the establishment of commercial warehousing in the state, goods stored but in transit for interstate commerce were also exempted in 1986.
Another series of amendments affecting property taxation were the adoption of homestead exemptions for the elderly and disabled. In 1973 a $5,000 homestead exemption for owner occupied residences for persons 65 and older was approved. In 1980 the exemption was raised to $10,000 and was extended to those who were "totally and permanently disabled." Finally, in 1982 the exemption was raised to its current level of $20,000.
Another series of amendments have been passed to protect or promote the financing of West Virginia's public schools. One permitted the legislature to require that schools receive funding at the maximum allowable rate. Another, adopted in 1957, modified the procedures under which school boards could submit levy and bond proposals to the voters. Instead of being limited to a three year levy, school levies could be for a five year period and could be renewed every five years. In addition, school levies could be up to 100 percent instead of 50 percent of the basic rate for each property class. Moreover, in 1982, another amendment reduced the percentage needed to approve school levy and bond proposals from 60 percent to a simple majority of voters. Also in 1982, the legislature authorized the presentation to the voters a statewide excess levy to support public schools. However, a subsequent referendum for implementing a statewide school excess levy was soundly defeated. Farm and forest lands also have constitutional provisions that affect their taxation. The forestry amendment, passed in 1946, allows for exemptions or other legislatively determined special tax treatment for those forest land owners who enter into a contract with the state for the "planting, cultivation, protection, and harvesting" of forests. Under the 1982 Tax Limitation and Homestead Exemption Amendment, farmland is to be valued based on its use in farming instead of its market value.
The 1982 Tax Limitation and Homestead Exemption Amendment was potentially the most important constitutional change affecting property taxes in West Virginia since the 1932 Tax Limitation Amendment. Assessment practices from the 1950s and earlier had created a large and increasing gap between the market values of real estate and the values at which they were appraised, assessed and taxed. This resulted in relatively low real estate property taxes. The 1982 amendment prescribed a revaluation of all real estate in West Virginia such that they would be assessed and taxed at 60 percent of their market values instead of 100 percent. It also permitted the Legislature to establish a higher percentage if two thirds of the members elected to each house approved. Because property tax collections were expected to increase substantially after the reappraisal, they were to be phased in over a ten year period with one tenth of the increase to take effect each year. Most of the reappraisal was carried out in 1983-84 by a privately owned firm contracted by the state. It was to be implemented in 1985 but conflicts arose between the administration and the legislature elected in 1984 and the Statewide Reappraisal Program was never put into effect.
Statutory Provisions
The state legislature is authorized to pass laws for the administration of property taxes. The statutes for implementing property taxes are contained in Chapter 11 of the State Code. These are amended at almost every legislative session. In most instances these changes are relatively minor. However, substantial changes were enacted during the regular session of the 1990 Legislature with the passage of House Bill 4127. Moreover, considerable revisions to H.B. 4127 were made in a special August session of the legislature with the passage of Senate Bill No. 8. A primary requirement of both of these is that the county assessors must reappraise all real estate within their counties over a three year period at true market values and place the values on the land books at 60 percent of the appraised values. A detailed examination of these changes will be discussed shortly.
Administrative Procedures
Overall administration of taxes, including property
taxes, is the responsibility of the State Tax Commissioner, an officer
appointed by the Governor. The Tax Commissioner has substantial powers
in property taxation, especially under the 1990 legislation. The
new legislation requires the formation of a "property valuation training
and procedures commission" which will have broad powers in establishing
procedures for property evaluation and for the training and certification
of county assessors and many of their employees, as well as all County
Commissioners. The procedures currently being used in West Virginia
are provided in Appendix A.
Judicial Rulings
Inevitably, disputes arise in the administration of the state's Tax Statutes. Many of these disputes are taken to the courts by corporate or individual taxpayers or at times by state or county officials. Most of these disputes are handled by state courts but some wind up in the Federal Court system and a few have been decided by the U.S. Supreme Court. These court rulings can significantly affect the administration of property tax procedures.
One of the more important state court rulings affecting
West Virginia property taxation was the 1982 Pauley, et al. v. Bailey,
et al. case, often referred to as the Lincoln County School Case or as
the Recht decision. It was brought in the Kanawha County Circuit
Court as a class action suit against state and county officials on behalf
of Lincoln County's school children. It claimed that Lincoln County's
school children were denied their Constitutional right to a "thorough and
efficient" education and, therefor, to the equal protection of the laws.
Judge Recht's finding was for the plaintiffs and included a ruling that
the manner of financing education was deficient. Part of the relief
directed the State Tax Commissioner to develop a plan to "...provide remedial
action for all of the deficiencies identified..." In a related case,
Killen v. Logan County Commission, the State Supreme Court of Appeals held
that assessments should be at 100 percent of appraised values.
These rulings were a major factor in the legislature's decision to
adopt the 1982 Tax Limitation and Homestead Exemption Amendment which required
all real property in West Virginia to be reappraised at fair market values
and to place assessments at 60 percent of those values.
Another important court case affecting West Virginia's property taxes involved the Allegheny Pittsburgh Coal Company and the East Kentucky Energy Corporation. They obtained relief from unequal treatment in a 1988 U.S. Supreme Court case they had brought against the County Commission of Webster County. Properties owned by these companies had been assessed on the basis of recent sales values whereas many similar properties in the county were assessed at much lower levels. The companies claimed that their properties were assessed at 8 to 30 times those of similar properties. The cases originally had been pursued in the state court system; the circuit court had found for the plaintiffs but that decision had been overturned by the State Supreme Court of Appeals. In the U.S. Supreme Court decision, Chief Justice Rehnquist's opinion held that "The assessments on petitioners' property violated the Equal Protection Clause."
Current Property Tax Legislation
The 1982 Tax Limitation and Homestead Exemption Amendment, an outgrowth of the Recht and Logan County decisions, set the stage for much of the current property tax legislation. Assessment practices and legislative changes during the half century following the passage of the 1932 Tax Limitation amendment had led to a situation where property taxes were administered in a capricious, erratic and variable manner not only between the various counties but often within a county (Colyer 1979a: Colyer and Templeton 1972, 1974, 1977; Levy and Colyer 1975). The most common characteristic was the proclivity for assessed values on real estate to be very low compared to their market values. When combined with the low maximum rates this resulted in low tax collections and the provision of relatively poor quality public services (Colyer, 1979a).
Three property values are relevant when evaluating
the property tax situation in West Virginia: 1) market values, 2) appraised
values, and 3) assessed values. The market value is the amount a
property should sell for in a voluntary exchange between informed and unrelated
buyers and sellers. The appraised value is the value placed upon
a property by the tax authorities. The property's appraised value
is supposed to be equivalent to its market value, but historically has
tended to be much lower than market values. For example, a study
of property assessments in 1972 revealed that properties were assessed
at about one third of their sales values, with county averages varying
from 10 to 53 percent (Levy and Colyer 1975). Later studies revealed
that the difference between market and assessed values in West Virginia
have grown even larger since the early 1970s. Assessments in 1980
averaged 27.6 percent of sales values, with a range between counties of
19.5 to 45.0 percent. In 1988, assessments still averaged only 29.85
percent of sales values (Department of Tax and Revenue, 1989). Finally,
the assessed value is the value used to calculate the taxes owed.
Currently, the assessed value is set by state law at 60 percent of the
appraised value.
The 1990 Legislation
On March 10, 1990 the West Virginia Legislature passed House Bill (H.B.) 4127. It was recommended by the Property Tax Study Commission which had been established by the 1989 Legislature. On August 31, 1990 HB 4127 was modified by Senate Bill (S.B.) 8. Both bills took effect upon passage. Together, they made substantial changes in the process of property valuation in West Virginia.
Purposes
The stated basic purpose of the 1990 legislation is to assure that property in West Virginia is fairly and equitably valued so that all citizens will be treated fairly and that no individual type or class of property will be over- or under-valued in relation to similar properties within each county and throughout the state. This is to be accomplished during a three year revaluation to be completed in 1993. County assessors are to conduct the revaluations except for public utility, industrial, and natural resources property which are under state jurisdiction. The revaluation is not to be an implementation of the state-wide reappraisal carried out in 1983-84 and the legislation is intended to be revenue neutral, i.e. not raise taxes. It also is intended to create procedures for establishing and maintaining fair and equitable values for all property, after the initial reappraisal, through three-year revaluation cycles together with annual updates of property values. The legislation requires that all properties, except for farms and managed timberland, be assessed at sixty percent of their fair market values.
Another purpose of the legislation is to limit the tax revenue increases that will result from the revaluations by requiring adjustments in property tax rates. The legislation also provides a method for financing the revaluation process.
The Revaluation Process
The valuation of properties for tax purposes is divided between state and county tax authorities. The State Tax Commissioner values industrial and natural resource properties including managed timberlands. The Board of Public Works is in charge of valuing public utility properties. County assessors value all other properties under guidelines provided by the Tax Commissioner.
County Assessor Duties
Each county assessor is required develop a county
valuation plan for using information currently available, for checking
its accuracy, and for correcting any errors found. County assessors
must submit their plans to the State Tax Commissioner on or before December
1, 1990. The plan is to be submitted for review and approval.
If it is not approved the plan must be revised as necessary. The
plans also must be revised and re-submitted every three years. The
county assessor cannot begin the valuation process and state funds cannot
be made available until the plan has received approval by the State Tax
Commissioner. If the county plan has not been approved by May 1,
1991, it is to be submitted to the Property Valuation Training and Procedures
Commission for resolution prior to July 1, 1991.
Once the valuation plan is approved, the assessors
must immediately implement the valuation process. They must, within
three years of the approval of the county valuation plan, appraise all
real and personal property under their jurisdictions at fair market value
except for the special valuations provided for farm land and managed timberland.
County assessors are required to use the procedures and methods established
by the Property Valuation Training and Procedures Commission and the system
established by the State Tax Commissioner. The properties are to
be placed on the tax books at 60 percent of the appraised values, i.e.,
at 60 percent of their fair market values. The new values, as for
all other county assessments, are subject to review and appeal by the
County Commission
In lieu of placing revalued properties on the books
at 60 percent of their appraised values during each of the initial three
years, the assessor can, with the approval of the State Tax Commissioner,
take two years, 1991 and 1992, to proportionately phase in all property
to the estimated 60 percent appraised value to be implemented by July 1,
1993.
Assessors may use any available information as an aid to valuing property, but the valuations should not be based exclusively upon the statewide electronic data processing network. This provision is intended to prevent the direct implementation of the earlier statewide mass reappraisal of property, while making that data available as one input into the reappraisal process. Willing and knowing refusal of any assessor or county commission to comply with the provision of the act or to correct any deficiencies ordered by the Tax Commissioner with concurrence of the Valuation Commission can constitute grounds for removal from office. Removal from office may be appealed to the circuit court.
After completing the initial required valuation each assessor must maintain current values on both real and personal property within the county. Every parcel of real property must be visited by the assessor's staff and the values updated every three years after completion of the initial valuation. In any year the assessed value of the property or species of property either falls below or exceeds sixty percent of current market value, the Tax Commissioner is to direct the assessor to make the necessary adjustments. If the county assessor fails to make the adjustments the Tax Commissioner may at the county commission's expense take reasonable steps to remedy the assessment deficiencies.
State Tax Commissioner Duties
The 1990 legislation gave new property valuation powers and duties to the State Tax Commissioner. These include determining the methods of valuation for real and personal property, including motor vehicles, managed timberland, farmland, and public utility property (former 18-9A-11 provisions). The Commissioner also is to provide valuations for industrial and natural resources properties. These valuations are to be at fair market values, except for managed timberland. Industrial property is defined as any real or personal property used for "assembling, processing and manufacturing of finished or partially finished products." Natural resources properties include coal, oil, natural gas, limestone, fireclay, dolomite, sandstone, shale, sand, gravel, salt, lead, zinc, manganese, iron ore, radioactive minerals, oil shale, managed timberland, and other minerals.
For the valuations the Commissioner must develop and follow plans which must be approved by Valuation Commission; provide the new values within three years of approval of the valuation plans; decide when, how, and what must be reported by the property-owners; maintain accurate values, send them to the appropriate county assessor, and provide support data needed to evaluate appraisals. The county assessors then multiply the values by 60 percent and place them on the tax rolls.
For natural resources property other than managed
timberland the Tax Commissioner is to make a county-by-county inventory.
West Virginia pays the costs of appraising industrial and natural resources
and through the Attorney General defends large assessments (those of two
million dollars or more) challenged by industrial and natural resource
property holders. The Tax Commissioner must review technology for
resource recovery every five years and adjust valuations, if necessary.
The Commissioner may contract with private firms for conducting the reappraisals.
The State Tax Commissioner also is required to establish the rules and
regulations for certifying land as managed timberland. To qualify
as managed timberland the owner must certify in writing to the Division
of Forestry that the property meets the Commissioner's definition of managed
timberland and contract to manage property according to a plan that will
maintain the property as managed timberland (as required by Section 53,
Article VI of the state's constitution). In addition, each owner
must agree to use the forest management practices specified in the publication
"Best Management Practices for Forestry." Property certified as managed
timberland shall be valued according to its use and productive potential.
All other timberland is to be appraised at its fair market value.
The Commissioner also establishes the procedures for valuing farmland
based on it use value, evaluates each assessor's performance based upon
the criteria established by the Valuation Commission and each county's
approved valuation plan and submits a preliminary statewide total assessment
and other information to the Legislature on or before February 15 each
year. The preliminary total assessment helps the legislature to decide
the uniform school levy rate for the state.
The Commissioner also maintains property valuations each year, establishes
rules for sale of computer generated materials and appraisal manuals, provides
training for all county assessors, "their appropriate staff members" and
county commissioners, and issues certificates to persons meeting basic
criteria.
Board of Public Works
Valuations of Public Utilities properties remains a function of the state's Board of Public Works. The Board is composed of the Governor, Secretary of State, Auditor, State Superintendent of Schools, Treasurer, Attorney General, and Commissioner of Agriculture. Public service companies include railroads, toll bridges, car line companies, pipeline companies, express companies, telephone and telegraph companies, gas companies, electric lighting companies, electric transmission companies, water companies and "all other public service companies."
The Board is required to submit to the Valuation
Commission by January 1, 1991 a plan for valuing the property of all public
service businesses. This plan is to contain procedures for implementing
on or before July 1, 1994 a uniform assessment equal to 60 percent of the
most current evaluation of all properties valued by the Board of Public
Works. It is to be updated annually after the initial revaluation
is made. While the legislation requires the Board to carry out various
tax functions, the mechanics of the tax assessment procedures are functions
of the Tax
Commissioner and State Tax Department.
Property Valuation Training and Procedures Commission
The 1990 legislation created an eleven-member Property Valuation Training and Procedures Commission, to be under the State Tax Department and to include the State Tax Commissioner who will serve as chairperson. The other members are three county assessors, five citizens of the state (one a certified appraiser), and two county commissioners. All are to be appointed by the Governor with the advice and consent of the State Senate. Nominees for the positions held by county assessors and county commissioners are submitted to the Governor by the West Virginia Assessor's Association and the County Commissioner's Association, respectively. All members, except the Tax Commissioner, are to be appointed to four-year terms. No more than seven members of the commission can belong to the same political party.
The Property Valuation Training and Procedures Commission must meet at least twice a year and may meet more often if called by the chairperson or at the written request of four members. The powers and duties of the Commission include developing training and certification criteria for persons required to receive training (assessors, their deputies and county commissioners), including requirements for minimum continuing education to maintain certification. It is to evaluate and approve the Tax Commissioner's plan for the appraisal of industrial and natural resources properties. The Commission is to establish uniform statewide procedures and methods for mapping, identification and collection of information on property, as well as requirements for property visitations which must include a good faith effort to contact owners of owner-occupied residential property.
The Commission has the power to make rules which are to include procedures for maintenance, use, sale and reproduction of microfilm, photography and tax maps. The Commission is to develop an outline for county valuation plans, including information to help it distribute state funds, and resolve disputes in the event that the Tax Commissioner and a county assessor cannot agree on the content of a county valuation plan. The Commission can appoint a special assessor, if the State Tax Commissioner has failed to do so and when the regular assessor has failed substantially to perform the duties required by law. It also is to establish objective criteria to evaluate the assessors and Tax Commissioner's performances. Any member must excuse him/herself from any consideration or vote on a matter that directly involves the member. Finally the Commission can assist in financing the county revaluation process by borrowing up to five million dollars ($5,000,000) to distribute to the counties on basis of need and the valuation plans submitted by each county.
Financing the Revaluation Process
Additional funds will be made available to finance the extra costs associated with valuation of property as mandated by the 1990 legislation. There are two sources for funding these activities. One is by dedicating an additional portion of each counties tax collections to the Assessor's Office. Beginning July 1, 1991 and for a period of three consecutive years an amount equal to two percent of the previous year's projected tax collections (approximately $8 million statewide) from the regular levy set by, or for, the County Commission, the County School Board and any municipality in the county and prorated as to each, will be set aside and placed in a valuation fund. After July 1, 1994 the valuation fund shall be continued, but at an annual amount of one percent of the previous year's projected tax collections.
The other source is the State Property Evaluation Training and Procedures Commission which is authorized to borrow up to five million dollars and distribute those to counties based on need and the valuation plans. The funds, to be placed in a revolving valuation fund, are to be used exclusively to fund the assessor's office. Basically, these funds are intended to enable assessors to maintain current evaluations and to perform the periodic revaluations. Funds will be distributed by the valuation commission among the counties based upon work load, need and other relevant factors. Beginning July 1, 1994 any county receiving these funds must repay the Valuation Commission the money received plus accrued interest.
Tax Increase Limitations
The 1990 legislation contains provisions to limit the increases in tax collections that result from the revaluation process. Generally, except for special levies, these limit the additional taxes to a one percent increase. For special levies the increase can be four percent. The increases can be set at higher levels after the appropriate governmental units hold public hearings and justify the higher increases. Values from additional appraisals or valuation from new construction or improvements to existing property, including beginning recovery of natural resources and newly acquired personal property, are not to be included in calculating the projected tax collections.
County and Municipal Levies
Generally, when the revaluations would result in a total tax collection greater than 101 percent of the previous years collections, the levy rates must be reduced proportionately between the county commission and the municipalities for all classes of property. The levy rate is to be reduced so as to produce no more than one hundred one percent of the previous year's projected property taxes. However, the county commission and/or municipal governments can increase their taxes by not more than ten percent over the previous year after justifying the need and holding a public hearing to discuss the increase. Special levies are not included in the reduced levy calculations.
School Board Levies
The school board levy rate provision is similar to that for municipal and county commission levy rates. The rate must be adjusted downward if the revaluation results in an increase of more than one percent in projected tax collections. However, this process is under state jurisdiction. The county school levies are to be aggregated to the state level. If the aggregate projected tax collections using existing levy rates exceed 101 percent of the previous years collections the levy rate must be adjusted downward. The school levy rate will be uniform for all counties. The state legislature can decide by law, after a public hearing, whether to increase the school levy rate. There is no ten percent limit on the total annual increase in taxes for the schools.
Special Levies
If there is any special levy by a county school board, municipality or county commission in effect as of March 1, 1990 that increases revenues by four percent or more as a result of the revaluation then a public hearing must be held to discuss reducing the special levy rate. But no levying body can reduce the special levy rate if it has been covenanted or otherwise dedicated and is necessary to pay bonds or other obligations. Essentially, no reduction has to occur if the levying body makes commitments on these funds.
County Commission
As the valuations of property in a county are completed,
the assessor delivers them to the County Commission, sitting as a Board
of Equalization and Review. The Board uses the appraised valuation
as a basis for determining the true and actual value of the property.
Any property owner can appeal to the Board if he/she feels that his/her
property is unfairly valued.
Notification
If the assessed value of a property is more than
ten percent higher than in the previous tax year, the assessor must notify
the property owner in writing. This notice must be made at least
fifteen days prior to the first meeting of the Board of Equalization and
Review which is held in February each year. To assist property owners
in understanding the revaluations the Property Valuation and Training Procedures
Commission is charged with developing a pamphlet explaining the reappraisal
process and its equalization goal. The pamphlet is to be made available
to all property owners.
Current Property Tax Levels and Comparisons
Property tax amounts are determined by the assessed value of the property and the tax rate. In West Virginia these vary by county and by municipality within a county.
Property Tax Rates
Maximum basic property tax levies, set by the 1932 Tax Limitation Amendment, are divided between four tax authorities, the state, county, municipalities, and schools. The state receives only a small share to help pay the expenses of supervising the system. The division among the other units is determined by the legislature. The allocations for the basic rates are given in Table 1 for the four classes of property.
Actual tax levies generally are higher than the basic rates because voters in most counties have passed revenue bonds to pay for infrastructure such as bridges and courthouses or have passed special levies for school, county or municipal uses.
Table 1. Allocation of Basic Tax Levy Among Tax Units By Class
(Cents per $100 Assessment)
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Property Tax Class
Tax Unit
I
II
III IV
?????????????????????????????????????????????????????????????????
State 0.25 0.50 1.00
1.00
County 14.30 28.60 57.20 57.20
Schools 22.95 54.90 91.80 91.80
Municipality 12.50 25.00 --- 50.00
Total 50.00 100.00 150.00
200.00
?????????????????????????????????????????????????????????????????
The total state average levies, including bond and excess levies, for each class are given in Table 2 for the 1979-1988 tax years. While the average rates varied slightly from year to year, the overall rates have been relatively constant. The majority of the bonds and excess levies have been approved for county school uses, although voters in many counties and
Table 2. State Average Allocations of Tax Levies Among Tax Units By Class in Dollars per $100 Assessment, 1979-1988
????????????????????????????????????????????????????????????????
Tax ---------
Property Tax Class ---------- State
Year I II
III IV Average
????????????????????????????????????????????????????????????????
1979 0.75 1.39 2.49 3.18 2.25
1980 0.76 1.40 2.51 3.22 2.28
1981 0.75 1.39 2.49 3.24 2.26
1982 0.74 1.37 2.45 3.21 2.24
1983 0.75 1.37 2.46 3.24 2.25
1984 0.76 1.38 2.46 3.25 2.27
1985 0.75 1.38 2.45 3.25 2.27
1986 0.75 1.37 2.43 3.23 2.25
1987 0.74 1.36 2.44 3.21 2.24
1988 0.76 1.37 2.46 3.22 2.25
?????????????????????????????????????????????????????????????????
Source: State Tax Department
municipalities also have approved such measures. Excess levies were in effect in 49 counties and bond levies in 29 counties for the 1990 tax year. There were only three counties (Clay, Pendleton and Pocahontas) without either an excess or bond levy of some type.
Assessed Values
Total assessed values of properties in West Virginia by class for real estate, personal property and public utility property are shown in Table 3. The personal property in Class II is for mobile homes. Public utility properties are listed separately because they are assessed by the state and then allocated to the counties. The homestead assessment values listed in Table 3, $1,659 million for real estate and $20 million for personal property (mobile homes), are exempt from property taxes.
Table 3. Assessed Values of Property in West Virginia by Class and Type,
Tax Year 1990, Millions of Dollars
????????????????????????????????????????????????????????????????????????
Class I Class II Class III Class IV
Total
????????????????????????????????????????????????????????????????????????
Real Estate
-- 4,852 2,679
1,957 9,488
Personal
2,031 131
5,358 2,566 10,085
Public Utility
148 --
2,176 653
2,977
Total
2,179 4,983 10,213
5,176 22,550
Homestead Exemptions --
1,679 --
-- 1,679
????????????????????????????????????????????????????????????????????????
Totals may not equal sums due to rounding.
About 45 percent of the total assessed values in West Virginia are Class III properties, those located outside of municipalities. Over half of the Class III assessments are for personal property and over 45 percent of the total assessments for the state are for personal property. The largest component in the personal property category are motor vehicles. It is interesting to note that the total assessed value of personal property exceeds that for real estate. This is due largely to the practice of assessing vehicles at 60 percent of their estimated market values based on annual published data while real estate has been assessed at a much smaller fraction of its market values. The State Tax Department's 1989 report of assessment to sales ratios indicated that for all real estate assessments were only 28.7 percent of their sales values. If these ratios are representative of all property in the state, assessment at 60 percent of market value would more than double assessments and real estate tax collections.
Taxes Levied
Property taxes levied for the 1990 tax year totaled nearly $512.8 million (Figure 1 and Table 4). Some 46.5 percent of that total came from personal property, 38.7 percent from real estate
Table 4. Tax Levies for Property in West Virginia by Class and Type,
Tax Year 1990, Thousands
of Dollars
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Class I Class II Class III Class IV
Total
???????????????????????????????????????????????????????????????????????
Real Estate
-- 68,032 66,436
64,194 198,661
Personal
15,621 1,720 136,485
84,320 238,146
Public Utility 1,007
-- 53,740 21,228
75,974
Total
16,628 69,752 256,661
169,742 512,782
???????????????????????????????????????????????????????????????????????
Totals may not equal sums due to rounding.
and 14.8 from public utility properties; these latter properties
are a mixture of real and personal property.
Distribution of Tax Levies
The property taxes levied in each county are distributed among the state, county government, municipal governments, and school boards. The amounts each unit receives are determined by the division of the general levy among them according to state legislation and as shown in Table 1. The amount of the assessments applicable to each government unit, and the special levies and bonds approved by the voters for each unit are given in Table 5 and Figure 2.
Table 5. Distribution of Property Taxes among Taxing Authorities
in
West Virginia,
Tax Year 1990 (Thousand Dollars)
??????????????????????????????????????????????????????????????????????????????
Current Excess
Bond Publica Total
Percent
Purpose Expense
Levy Levy Improvement
Tax Levies of Total
??????????????????????????????????????????????????????????????????????????????
State
-- --
-- --
1,842 0.36 County
104,765 18,941
103 348
124,157 24.21
Schools 168,139
147,619 30,391 1,001
347,149 67.70
Municipal 27,932
7,603 4,099
0 39,634
7.73
Total 300,835
174,163 34,593 1,349
510,940 100.00
??????????????????????????????????????????????????????????????????????????????
Sums may not equal totals due to rounding
aPublic improvements are basic levy funds used for capital expenditures.
About 60 percent of the total property tax revenue is derived from the basic levy. Schools receive about 56 percent of the revenue derived from the basic levy, but over 67 percent of the total revenue because a large proportion of the excess and bond levies are for school purposes.
Potential Impacts of Property Revaluation
The revaluation of property at fair market values should result in about a 58 percent increase in the appraised and assessed values of most classes of property according to 1990 data from the State Tax Department. The 1990 totals for assessed, appraised and estimated market values by tax class for all nonutility properties are shown in Table 6. The greatest discrepancy between market and appraised value is in Class II
Table 6. Total Assessed, Appraised, and Estimated Market Values
by Tax Class for Nonutility
Properties, West Virginia,
Tax Year 1990
?????????????????????????????????????????????????????????????????
Type of Value Class I Class II Class III Class IV
Total
?????????????????????????????????????????????????????????????????
----------- Millions of Dollars -------------
Assessed 2,043 6,648
8,040 4,525 21,258
Appraised 3,115 10,685
12,336 7,217 33,355
Market 3,284 22,455
16,481 10,409 52,630
?????????????????????????????????????????????????????????????????
property (owner occupied homes and farms). Appraised values are 46 percent of estimated market values for Class II properties. For Classes III and IV, the appraised values are about 75 percent of their estimated market values. However, classes III and IV contain large amounts personal property, mostly vehicles which are typically appraised at 60 percent or more of their estimated market values.
Comparisons with Other States
As shown in Table 7, property taxes are less important as a source of state and local tax revenue in West Virginia than is typical for the United States. Only 16.5 percent of the state's revenue is from property taxes compared to an average of 29.7 for all states. The difference is made up largely by higher sales tax collections in West Virginia. While the Tax Limitation Amendment probably contributes to this difference, the primary cause has been the failure to appraise and assess real estate at values close to their actual values.
Table 7. Percentage Distribution of State and
Local Tax Collections by Source, 1985
????????????????????????????????????????????
WEST VIRGINIA UNITED STATES
????????????????????????????????????????????
TOTAL TAXES 100.0 100.0
INCOME TAX 25.9 25.5
SALES TAX 49.5 36.1
PROPERTY TAX 16.5 29.7
OTHER TAXES 8.1 8.7
????????????????????????????????????????????
Property taxes have been decreasing in importance as a source of state and local revenue for both West Virginia and most other states (Table 8). In 1960, the average percentage of state and local revenues from property taxes was 37.7 for all states and 24.9 for West Virginia. By 1988 these percentages had declined to 21.6 for all states and to 12.9 for West Virginia, a decline of 43 percent for all states and 48 percent for West Virginia.
Table 8. Property Taxes as a Percentage
of State and Local Government Own Source
General Revenue, 1960 to 1988
???????????????????????????????????????????
WEST VIRGINIA UNITED STATES
???????????????????????????????????????????
1960 24.9 37.7
1965 22.1 36.2
1970 18.5 31.3
1975 15.3 28.5
1980 12.7 22.8
1985 12.2 21.1
1988 12.9 21.6
???????????????????????????????????????????
An additional comparison indicates that West Virginians pay less total taxes and less property taxes per capita than is the average for taxpayers in other states (Table 9). Among the 50 states, West Virginia ranks 47th in total local and state taxes per capita and 45th in property taxes. However, West Virginians are much closer to the national average in total state and local taxes as a percentage of personal income, although they pay considerably less in property taxes (Table 10). The state ranks 30th in state and local taxes as a percentage of personal income, but is 43rd in property taxes.
Table 9. Per Capita Local and States Taxes by Source,
Fiscal Year 1988
?????????????????????????????????????????????
UNITED STATES WEST VIRGINIA
?????????????????????????????????????????????
TOTAL $1,772 $1,212
PROPERTY 538
229
OTHER 1,234 938
?????????????????????????????????????????????
Table 10. Local and State Revenue from Taxes as a
Percentage of Personal Income, Fiscal
Year 1988
??????????????????????????????????????????????
UNITED STATES WEST VIRGINIA
??????????????????????????????????????????????
TOTAL 11.57% 10.88%
PROPERTY 3.51 2.05
OTHER 8.06 8.83
??????????????????????????????????????????????
West Virginia has a greater proportion of its property assessed by state authorities than the typical state (Table 11). The latest available data on nationwide assessments is for 1985. The relatively large proportion of property being assessed by state authorities in West Virginia at that time was primarily due to the state's role in assessing utilities. The 1990 legislation also gives the state the responsibility for assessing industrial and natural resources properties. As a result, the state government's role in assessing property will increase even further in the future.
Table 11. Percentage Distribution of Property
Assessed by State and Local Tax Authorities
?????????????????????????????????????????????
WEST VIRGINIA UNITED STATES
?????????????????????????????????????????????
STATE ASSESSED 16.8
7.1
LOCALLY ASSESSED 83.2 92.9
?????????????????????????????????????????????
Property Tax Issues, Concerns and Recommendations
Implementation of the 1990 legislation (H.B. 4147 and S.B. 8) will have important impacts on the property tax structure and can also significantly affect the amounts of property taxes that individuals and businesses pay. The effects will vary by county since the County Commissions and municipal governments can, after holding public hearings, authorize tax rate increases above those permitted by the legislation. The state legislature also can affect statewide taxes through its authorization to raise property tax rates for schools, again after holding public hearings. These and other issues and concerns will have to be addressed by policy makers, taxpayers, and voters.
Market, Appraised and Assessed Values
Historically a major issue has been the tendency for appraised values to be considerably less than market values. These have differed between counties and within counties, both within and between classes of real estate (Colyer and Templeton 1977; Levy and Colyer 1975). Such deviations can result in vastly different tax burdens for individuals or businesses who own similar properties with respect to type (class) and value. The 1990 legislation has objectives and procedures to both update all property appraisals to current fair market values and to assure that they are updated periodically, at least every three years. These have been objectives in previous legislation but the procedures used have not assured periodic updates and the practices of each county assessor have varied with respect to carrying out reappraisals and updating property values. The 1990 legislation gives greater authority to the State Tax Commissioner and should help overcome the diversity of practices that have existed in the past.
Tax Levies and Tax Rates
The levy rate multiplied by the assessed value determines the tax obligation for a particular piece of property. Since the passage of the 1932 Tax Limitation Amendment, property tax rates in West Virginia have nearly always been at the maximum rates allowed by that amendment for each class of property, plus any special levies approved by the voters in each county. However, the 1990 legislation will affect the tax rates that can be used as well as the assessed values that will be used since the legislation limits the amount of the increase in total taxes from the regular county, municipal, and school levies on existing properties to one percent of the previous years totals; the increase from excess levies is to be no more than four percent unless dedicated for bonds or other purposes. However, in all cases, the levying authorities can allow larger increases after holding public hearings. For county and municipal levies the maximum increase is limited to ten percent of the previous years taxes, but there is no such limit for excess and school taxes. School tax rates are to be uniform throughout the state and any increases over the one percent limit will be determined by the state legislature after holding public hearings. Thus, the potential increase in school taxes is that resulting from using the new assessed values, 60 percent of fair market values, and the maximum levy rate allowable by law. The schools, under current legislation, receive about 70 percent of the total property taxes collected in each county.
Updating Appraisals and Assessments
The 1990 legislation directs that real estate appraisals and assessments are to be updated continuously based on a three year reappraisal cycle. The legislation also allows for annual updates for all property based on annual proportional, equal percentage, increases for all properties. Annual updates will be determined by the State Tax Commissioner based on sales/assessment ratio studies and other information on general changes in property values. Insurance companies, for example, update insured values of homes and other construction based on changes in the index of construction costs. Such updates can result in increases in the taxes paid, up to a one percent increase or more if public hearings are held.
Farmland Assessment
Every state has property tax legislation that provides
for some form of use value assessment of farmland. The market value
of farmland is usually larger than its use value, i.e., than the value
justified by its earning from farming. Use value assessment therefore
reduces the tax burden and makes farming more economically viable.
The 1982 Tax Limitation and Homestead Exemption Amendment provided that
farmland in West Virginia was to be assessed at its use value instead of
its fair market value as part of the mass reappraisal process. Under
the implementing legislation and subsequent regulations developed by the
Tax Commissioner farmland owners were to apply for use value assessment
each year. However, the mass reappraisal was not implemented and
the use value assessments for farmland have not been used for tax purposes.
This did not upset most farmers because most farmland use values in West
Virginia are higher than the values recorded under current appraisal procedures.
However, the 1990 legislation does mandate reappraisals for farmland at
their use values.
There are two farmland issues that might need reconsideration by the state legislature. First, under current legislation a farm residence, including one acre of land, is to be assessed at fair market value. This practice offsets much of the tax savings farmers receive from use value assessment. Second, most states have rollback provisions or penalties that must be paid when land that has been benefiting from use values assessment provisions is converted to nonfarm uses. This is done because the main purpose of the use value approach is to prevent the conversion of farmland by making farming more profitable. The rollback provision consists of collecting the taxes lost during the years the land was taxed at its use value instead of its market value. West Virginia does not have a rollback provision and may want to consider such legislation. However, such a provision may require a constitutional amendment since the 1982 Tax Limitation and Homestead Exemption Amendment states that "the determination of value shall be according to its fair and reasonable value for farming purposes..."
Timberland Assessment
A 1946 amendment to West Virginia's Constitution provided the legislature with the authority to define and classify forest lands. It also allows the legislature to exempt forest lands from taxes or to tax such lands by methods to be determined by the legislature when the owner has contracted with the state with respect to the "planting, cultivation, protection, and harvesting" of the forest land. The managed forest land provisions of the 1990 legislation directs the Tax Commissioner to develop a method for taxing managed forest land according to its use value and productive potential. The owner of such land must manage the land in accordance with the publication "Best Management Practices for Forestry" and certify to the State Division of Forestry that the land meets the definition of managed forest land and that he will manage it to comply with the definition of managed forest land. The rules and procedures for valuing managed timber land were to be developed by the State Tax Commissioner by October 1, 1990. Forest land that does not qualify as managed timberland is to be appraised at its fair market value.
Excess Acreage Tax Proposals
Legislators and others frequently have suggested that excess acreage (land not used for productive purposes) should be taxed. Examples are H.B. 3198 and H.B. 4635 introduced in the 1988 legislative session. The purposes of such legislation are to provide additional revenue, to prevent holding large tracts of idle land, and to make larger, wealthier land owners shoulder a greater share of the state's tax burden. However, an excess acreage tax, which charges corporations holding more than 10,000 acres a one time tax of 5 cents per acre, already exists under a 1905 law (Chapter 11-12-75). This law has never been challenged in the courts. Archibald, in a 1988 West Virginia Law Review article, analyzed such laws and concluded that they were more like property taxes than franchise or privilege taxes. As a result, she concluded that they probably are unconstitutional since they would tax some properties within a single class differently that other properties in the same class. In addition, they also might result in property taxes that exceed the maximum rates permitted under the 1932 Tax Limitation Amendment.
Regressivity of Higher Rates for Rented Property
Owner occupied residences are in Class II for property tax purposes and as such are taxed at a maximum basic rate of $1.00 per $100.00 of assessed value. Residences that are rented are in Class III if outside municipalities or Class IV if inside. As such, they are taxed at $1.50 and $2.00 per $100.00 value for Class III and IV, respectively. The higher rates for rental properties are justified on the grounds that since the owners are in the business of renting they should pay the higher rates that other businesses pay on property. However, rental property owners tend to pass those taxes on to the renters, as they do all other costs of owning and maintaining the residence. Since the typical renter tends to have a lower income than the typical homeowner, the property tax on residencies tends to be regressive; that is, renters tend to pay a higher proportion of their incomes in the property taxes passed on to them by the owner than do those who own their residence. The state legislature may want to consider legislation to rectify this situation.
Regressivity of the Homestead Exemption
The homestead exemption is another area which results
in unfairly distributed tax burdens when ability to pay is a consideration.
Currently, persons 65 years of age and older as well as permanently disabled
persons receive a $20,000 dollar assessment exemption from taxes for owner-occupied
residences. This is a blanket exemption that is received regardless
of the person's income. Some other states that have similar exemptions
use a "circuit breaker" or other provision to make eligibility for or size
of the exemption dependent on the taxpayers income. States that have
circuit breakers generally implement them in conjunction with the filing
of state income tax forms. Since the constitutional amendment that
provides for this exemption makes it "subject to such requirements, limitations
and conditions as shall be prescribed by general law" the legislature apparently
has the authority to pass such legislation if it so desires.
Personal Property
Personal property taxes for individuals in West Virginia consist primarily of taxes on automobiles. These are updated annually and are the one species of property where the appraised values are close to fair market values, although the valuation process does not account for differences in accessories on similar models of cars. This results in relatively high personal property taxes. The limitation of a one percent annual increase in total taxes on existing properties and the subsequent decrease in the tax rate could result in lower taxes on such personal property. Thus, implementation of the 1990 legislation probably will result in a redistribution of property tax burdens with real estate owners paying a larger share of the total property taxes.
The Tax Calendar
Tax assessments are based on property owned on July
1 of the assessment year, but with the taxes not paid until after July
1 of the following year. For example, property owned and assessed
as of July 1, 1990 will not pay the tax until after July 1, 1991.
One half of the tax is actually due by September 1 and the other half by
March 1. Furthermore, property acquired after July 1 will not be
assessed until the following year when, in the case of an automobile, it
will be one year older and worth considerably less. This results
in the loss of a considerable amount of tax revenue, since a car can be
owned for nearly two years before any taxes are paid. To rectify
this, the state legislature may want to consider the way other states deal
with personal property taxes on automobiles. Many states require
that an automobile be assessed for a partial year if it is acquired after
the assessment date. In this way, the owner pays taxes on the value
of the new automobile for the fraction of the tax year that it is owned.
In addition, an owner may also get a tax refund for an automobile that
is sold or otherwise disposed of during the tax year.
References
Archibald, Ellen R. 1988. "Proposed 'Nonproduction' or 'Excess Acreage' Tax: Viable Revenue Source or Unconstitutional Tax?" West Virginia Law Review 90:953-990.
Bowman, John H. 1983. Draft Report to the West Virginia Tax Study Commission on Research Issue No. 4: Property Tax Equity and Efficiency. Morgantown, WV: Dept. of Public Administration, West Virginia University.
Colyer, Dale. 1981a. "Issues and Alternatives in Mineral Taxation." In Real Property: Part IV, Mineral Taxation eds. Anthony Ferrise, Dale Colyer, and Lyn Dotson. CD Pub. No. 710. Morgantown, WV: Cooperative Extension Service, West Virginia University.
________. 1981b. "Land Ownership Profile for West Virginia," SP-81-4. Morgantown, WV: Div. Resource Management, West Virginia University.
________. 1980. "Relief of Property Taxes on Mineral Rights," SP-80-4. Morgantown, WV: Div. Resource Management, West Virginia University.
________. 1979a. "A Half Century with Proposition 13." SP 79- 1. Morgantown, WV: Division of Resource Management, West Virginia University.
________.1979b. "Issues and Alternatives in Mineral Taxation," SP 79-9. Morgantown, WV: Div. of Resource Management, West Virginia University.
________. 1977. Summary Report - Taxation: A Land Use Issue in West Virginia. R.M. No. 65. Morgantown, WV: Division of Resource Management, West Virginia University.
________. 1975. "Assessment Policies and Practices," The Proceedings of the Conference on Rural Land Use Policy in the Northeast, Northeast Regional Center for Rural Development Publication 5 (February).
________. 1973. "Assessment-Sales Ratios for Real Estate Transfers in West Virginia: 1968-69." Paper Presented at the Annual Northeast Resource Economics Committee meeting, Boston, Massachusetts, November 6.
Colyer, Dale and Mary Templeton, 1977. Land Transfers, Values and
Assessments for West Virginia, 1968-69. Bulletin #651. Morgantown,
WV: West Virginia University Agricultural
Experiment Station.
________. 1974. "Tax Assessment in Relationship to Sales Values
for Real Estate in West Virginia." West Virginia Agriculture and
Forestry. Morgantown, WV: West Virginia University Agricultural Experiment
Station.
________. 1972. Land Transfers, Values, and Assessments in Braxton County, West Virginia: 1968-1969. RM No. 3. Morgantown, WV: Division of Resource Management, West Virginia Agricultural Experiment Station.
Department of Tax and Revenue, 1989. West Virginia 1988 Assessment Ratio Study. Charleston, WV: Property Tax Division.
Ferrise, Anthony and Dale Colyer, 1984. Real Property: Farmland
Rental Values in West Virginia and Property Tax Implications. R.
D. Pub. 721. Morgantown, WV: Cooperative
Extension Service, West Virginia University.
________. 1983. Summary of Senate Bill No. 10: The Property Tax
Reappraisal Program in West Virginia. R.D. Pub. No. 720. Morgantown,
WV: Cooperative Extension Service, West Virginia
University.
Ferrise, Anthony, Dennis K. Smith and Dale Colyer. 1988. Questions and Answers on the School Funding Amendment to the Constitution of West Virginia. R.D. Pub. 735. Morgantown, WV: Cooperative Extension Service, West Virginia University.
Ferrise, Anthony, Dale Colyer and Lyn Dotson, eds., 1981. Real
Property: Forum Proceedings, Part I, An Overview of Real Property
and Taxation Issues. CD Pub. No. 707. Morgantown, WV: Cooperative
Extension Service, West Virginia University.
__________. 1981b. Real Property: Forum Proceedings, Part II,
An Overview of Property Taxation Issues. CD Pub. No. 708. Morgantown,
WV: Cooperative Extension Service, West Virginia University.
__________. 1981c. Real Property: Forum Proceedings, Part IV, Mineral Taxation. CD Pub. No. 710. Morgantown, WV: Cooperative Extension Service, West Virginia University.
Henshaw, Harry P. III. 1990. 1990 Guidebook to West Virginia Taxes. Chicago: Commerce Clearing House, Inc.
Levy, Alan J. and Dale Colyer, 1975. An Analysis of the Ratios of
Assessments to Sales Values for Real Estate in West Virginia. Bul.
640. Morgantown, WV: West Virginia University. Agricultural Experiment
Station.
Shamsudin, Mohd. Noor Bin and Dale Colyer, 1979. Mineral Rights
and Property Taxation in West Virginia. R.M. No. 74. Morgantown,
WV: Division of Resource Management, West Virginia University.
State MRP Land Use Committee, 1976. Taxation: A Land Use Issue in West Virginia. Charleston, WV: Governors Office of Federal-State Relations.
State Tax Department, 1989. Classified Assessed Valuations, Taxes Levied, 1988 Tax Year. Charleston, WV: Office of Local Government Relations.
White, David, 1989. The Reappraisal of Timberland in West Virginia: Background Information, Comments, and Recommendations. Report to the West Virginia Property Tax Study Commission, October.
__________. 1987. "West Virginia Forest Land Value and the Property
Tax," W. Va. Forestry Notes, No. 13.
APPENDIX A
West Virginia's Property Tax Procedures
The property tax process in West Virginia begins each year on July 1. All property owned as of July 1 is to be assessed for the following tax year. Within a county the assessor or a deputy assessor attempts to visit property owner and complete an assessment form. If unable to visit with the owner the assessor or deputy will leave or distribute tax forms which the owner can complete and mail or take to the assessor's office. The property owner is responsible declaring any property owned and is not excused from assessment or tax liabilities due to the failure of the assessor or deputy to visit with and obtain the assessment form. While technically assessing both real and personal property, the annual visit and declaration is basically for the assessment of personal property. This process is to be completed in the summer and fall each year. Assessments conducted by State authorities for the counties are provided to the county assessor for inclusion in the county tax books.
The next step is for the county assessor to prepare the tax book for the county. These are now computerized tax rolls. The assessor updates values and adds new assessments to the tax rolls. When the tax books are completed they are provided to the County Commission for use when they sit as the Equalization and Review Board. A copy of the tax books in electronic form also is sent to the State Tax Commissioner. Citizens who wish to examine the tax books may do so in the Assessor's Office.
The County Commission, sitting as the Board of Equalization and Review, examines the property valuations, listens to appeals from individual property owners and may adjust the assessments. The County Commission then certifies the assessments as being the "true and actual assessment for tax purposes." Property owners who are not satisfied with their assessments after appealing to the Board of Equalization and Review may appeal to the Circuit Court for relief.
Tax liabilities are determined by multiplying the assessed valuation by the tax levy rate. The total levy rate is determined by the regular levy rates of the County Commission, municipality for properties inside municipal limits, and county school board plus the rates for any special levies of those bodies. Technically, the levying body is to determine its revenue needs and divide by the total assessed value to determine the rate. Practically, this has been at the maximum rate allowed under the West Virginia Constitution. However, with the implementation of the revaluations under the 1990 legislation the levy rates may have to be adjusted downward so as to produce no more than 101 percent of the revenue that would have been received with the rates and values in effect from the previous year, unless public hearings are held to explain and justify the need for a higher rate. The levy rates are used to calculate the tax liability of each property owner.
The tax rolls are then forwarded to the County Sheriff
who prepares and mails tax bills to each property owner. This usually
is done in July for the tax year then in effect; the July 1 - June 30 fiscal
year. The taxes are due in two equal installments, one to be paid
by September 1 and the second by the following March 1. Payments
made before the due date are discounted by a small amount while failure
to pay on time results in the addition of penalties to the tax bill.
If no tax payment is made the property is subject to seizure and Sheriff's
sale at public auction.