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Houck, Harold — Tue, 19 Jun 2012 19:51:45 GMT

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The basic idea of property taxes is simple. Taxing districts determine how much money they need to operate and the taxes you owe is your share of that amount. By understanding how the process works, you can get a clearer picture of why your tax bill looks the way it does.

From levy to taxes owed: How it works

Phase 1: Taxing districts sets levy

Each taxing district sets their levy. This is the total amount of money the district needs to collect through property taxes to balance their budget.

Phase 2: Tax rate

The tax rate is determined by spreading the levy over the tax base. A tax base is the total value of all properties that are within a district.

Districts with a growing tax base may have a lower tax rate. This is because the levy is being spread over a greater value.

Phase 3: Taxes owed

Your tax bill is calculated by multiplying your property's taxable value by the total tax rate for your location.

Your taxable value and the tax base

Your value

Every year, the classification and value of your property is determined. The value or estimated market value is the price your property would likely sell for on the open market. The classification is based on a property's use.

The estimated market value may be reduced if you qualify for any exclusion or deferral. This is known as the taxable market value and is what you pay taxes on.

For more details on the valuation and classification of property, visit Assessing Property.

Tax base

Your property makes up a small piece of the total tax base. A district's tax base is the total value of all properties that are taxed by the district.

Types of taxable value

There are two main types of taxable value, the tax capacity and market referendum. Most property classifications like residential, commercial and industrial are taxed on both values.

Tax Capacity Value: The value of a property based on the taxable market value and class rate. The class rate is the percentage of value that is subject to taxation. Different classifications have different class rates.
Referendum Market Value: For most classifications, this value is equal to the estimated market value.

Reports: Levies, tax base, and tax rates

Tax Levies: Compares the levy amounts certified by a taxing district for the current and prior year.

Tax Base: Gives the total tax base upon which a taxing district's levy is spread.

Tax Rates: A breakdown of the tax rate by taxing district. You will have to know what unique taxing area (UTA) a property is within. The Tax Facts document available in Property Information Search lists the UTA.

2025 Taxes

Tax Levies
Tax Capacity Values
Referendum Market Values
Tax Rates

2026 Taxes

Tax Levies
Tax Base
Tax Rates

Why did the amount I owe change?

Estimated Value

Actual sales of property are reviewed to determine a property's assessed value. New construction and improvements made to a property generally increase its market value.

For more information on how property is valued, see Determining Market Value.

Did this impact your property?
Refer to Step 1 of the Proposed Tax Notice or Property Tax Statement.

There will be a change in Estimated Market Value between the two years.

Property classification

Some classifications receive a benefit like a credit or exclusion. Others are subject to additional tax types. The following are common classifications that have unique characteristics that impact property taxes.

Residential property can lose or gain the homestead exclusion
Agricultural parcels can be eligible for credits
Commercial, industrial and seasonal recreational properties pay a state general tax
Some property classifications are subject to fiscal disparity tax.

Did this impact your property?
Refer to Step 1 of the Proposed Tax Notice or Property Tax Statement.

You will see two different classifications listed.

Taxing district levies

Districts determine their levy for the year. It can change depending on the needs and wants of the community. Changes in federal and state aid can influence levies.

Did this impact your property?
Refer to the back page of your Proposed Tax Notice or the documents in the Reports: Levies, Tax Base, and Tax Rates section.

The percent change indicates if the levy increased or decreased.

Referendums - November Election

Some referendums are approved by voters and appear as a question on the ballot during a general election. The most common are for schools. Passed referendums will increase the taxes due.

Did this impact your property?
Refer to your Proposed Tax Notice in the tax breakdown section. There will be a statement indicating a referendum on the ballot in November.

Special assessments added

Improvements that directly beneﬁt your property may be funded through a special assessment. Common special assessments include water lines, curb and gutter, and street improvements.

Did this impact your property?
Refer to your Property Tax Statement in the tax breakdown section. If there is an amount listed in Line 13 then there is a special assessment on your property. For information on the special assessment contact the city or township.

External sources

The following is a list of other organizations and government units that have property tax resources available to the public. These links are not controlled by the county and are provided as a service.

Minnesota Department of Revenue

The Minnesota Department of Revenue provides information related to property taxes.

League of Minnesota Cities

The League of Minnesota Cities is an association that provides education and resources to cities throughout the state.

Minnesota House Research Department

The Property Taxes section of the House Research Department provides information on property taxes.

Key sections to look at are:

Overview of the Property Tax System
Property Tax Relief Programs

Site Title: Property Tax 101

Contact Information:

Contact

Property Taxation & Records
651-438-4576
taxation@co.dakota.mn.us

Understanding Property Taxes: Pages

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From levy to taxes owed: How it wo​rks

Phase 1: Taxing d​​i​​stricts sets levy

Phase​​ 2: Ta​​x rate

Phase 3: Tax​es​​ owed

Your taxable value an​​d​ the tax base

Your v​​al​ue

Tax ​base

Types of ta​xa​ble value

Reports:​ Levies, tax base, and ta​x rates

2025 T​axes

2026 Taxe​​s