Understanding Your TNT

The Proposed Property Tax Notice, also known as the Truth in Taxation (TNT) Notice, is mailed in mid-November each year. The notice estimates the property tax you will pay in the following year if the taxing jurisdictions approve their levies as proposed.

Items on Proposed Property Tax Notices:

Estimated Market Value: Estimated market value is the amount the Assessor estimates a buyer would pay for your property if it were offered for sale. Each year the assessor reviews the market valuation of your property to determine if changes in the real estate market or improvements to your property require a change in the estimated market value. Market value deferments for Green Acres and open space, exclusions under the platted vacant land, limited market value and ‘This Old House’ laws are subtracted from the Estimated Market Value to arrive at the Taxable Market Value.

Homestead Exclusion: The 2011 Legislature repealed the Homestead Market Value Credit, (the homestead credit), and replaced it with a new Homestead Market Value Exclusion. The last year of the credit is for property taxes paid in 2011 and the exclusion begins for property taxes payable in 2012. The exclusion is a reduction in the amount of property value subject to tax.
 
Taxable Market Value: This is the property value used to calculate your property taxes. It may be less than the estimated market value, the value assigned by the county assessor, that you received on your value notice in March.

Property Classification: The Minnesota legislature has established different property tax classifications based on the use or type of property. It also has established specific benefits that apply to particular uses. The most common are:

• Residential Homestead
• Relative Homestead
• Disabled Homestead
• Agricultural
• Commercial, Industrial
• Public Utility
• Seasonal Recreational

State General Tax: A statewide property tax levied by the State of Minnesota on commercial, industrial and seasonal properties. These taxes are paid to the State of Minnesota and go to the State General Fund. A portion is used to fund school related expenditures.

School Voter Approved Levies: Includes all levies and debt obligations approved by the voters in that school district.

Note: If a referendum was passed at the November general election, the increase will not be reflected on the Proposed Property Tax Notice.

Other School Levies: Includes school levies for community services and debt obligations that are not voter approved.

Other Special Taxing Districts: Includes the Community Development Agency (CDA), Housing and Redevelopment Authorities (HRA), and watershed districts. Not all areas have each of these districts.

Tax Increment Financing (TIF):  A local development tool used by cities and other development authorities to finance redevelopment of blighted areas, economic development, moderate and low-income housing, and other projects by “capturing” the additional property taxes generated by the project to finance up-front development costs. Minnesota Statutes 469.174 thru 469.176 authorize the use of TIF by development authorities.