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Parcel tax
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A parcel tax is a form of property tax assessed at a rate based on the characteristics of a parcel—or unit of property—rather than a rate based on the assessed value of the property, which is the standard method of levying property taxes. A parcel tax rate can differ based on the type of property. For instance, improved and unimproved properties may have different rates, and residential and commercial properties may also have different rates.
Methods used to divide parcels include:
- by single-family home
- by acre
- by apartment unit
- by square foot
A parcel tax is considered a qualified special tax in California and may be imposed by a local unit of government, such as a city, county, school district, or special district. Special taxes are permitted by the California Constitution, and they require a two-thirds (66.67%) vote for approval.
Parcel tax revenues can be used for any type of spending, including construction costs, employee salaries, school funding, and other projects or spending needs.
Elections to vote on parcel tax measures must take place on established election dates. In even-numbered years, these elections dates are in March, April, and November. In odd-numbered years, the elections are in March, June, and November. However, when an election is held by mail only, the election dates can also be set in May or August (odd-numbered or even-numbered years) and June (even-numbered years).
Notice of a parcel tax election must be given at least 90 days in advance of the election date.
School parcel taxes
- See also: Parcel tax elections in California
As of 2017, California was the only state that allows parcel taxes as a method for funding schools.[1]
According to the Legislative Analyst's Office, local taxes, including parcel taxes, accounted for 25 percent of public school funding in California in the 2016-2017 school year. The majority of school funding came from the state government, accounting for 60 percent throughout the state. The remaining 15 percent of school funding came from federal, local miscellaneous, and lottery funding.[2]
Per-pupil spending varies by school district based on several factors, including how state and federal grants are allocated. The implementation of a parcel tax can also increase per-pupil spending in a district. Between 2008 and 2017, the majority of all approved school parcel taxes were concentrated around the San Francisco Bay Area. See Parcel tax elections in California to learn more.
Non-deductibility
According to California's Franchise Tax Board, parcel tax payments are not deductible against federal and state income tax liabilities.[3]
To be deductible, a property tax must be a percentage of a home's assessed value. Since parcel taxes are not based on the value of a home, they are therefore not deductible, according to the FTB.[4]
According to the agency in November 2011, most homeowners throughout the state do deduct their entire property tax bill from their federal and state income for income tax calculation purposes, including the part of their property tax bill that is owed because of parcel taxes, which are non-deductible. The FTB launched a public awareness campaign to inform California property taxpayers about the non-deductibility of parcel tax payments.
See also
External links
Additional reading
- Sierra Sun Times, "PPIC Finds A Well-Designed Parcel Tax Is a Useful Tool for Local Governments," April 16, 2015
- Cal Tax Foundation, "Piecing Together California Parcel Taxes," September 2014
Footnotes
- ↑ Local Revenues for Schools: Limits and Options in California
- ↑ Ed 100, "Who Pays: Where California's Public School Funds Come From," accessed December 28, 2017
- ↑ San Francisco Chronicle, "Some property tax charges not deductible," November 24, 2011
- ↑ Franchise Tax Board, "Understanding the Real Estate Tax Deduction"
