Report: Utah owners face greater tax charges than business property homeowners

SALT LAKE CITY — Utah owners are paying the next price in property taxes as a result of many counties lack ample knowledge to judge business property belongings, inflicting a “tax shift” to residential properties, in accordance with a current legislative audit.

The report from the Workplace of the Legislative Auditor Basic additionally discovered the state division over property taxes “has been passive of their oversight function” and really useful extra transparency within the property tax attraction course of. Auditors mentioned lawmakers ought to take into account a coverage to require the disclosure of some actual property sale knowledge to higher information valuations, although their report famous that some fear such disclosures would infringe on privateness.

Auditors write that property taxes in some counties elevated between 100% and 235% for the common house owner between 2017 and 2022, pushed by a number of components, together with a legislative freeze of the statewide primary tax price “unexpectedly leading to a rise in taxes collected for college districts.”

“Residential property values reportedly elevated quicker than different property varieties, shifting extra of the burden to residential properties,” the report provides.

Compounding that improve in worth is a scarcity of information on business properties, auditors mentioned, which ends up in county assessors being “hesitant to vary property valuations” on business properties.

“Due to this fact, in some counties, business property values don’t change for a number of years,” the report states.

The information on business property gross sales the Property Tax Division receives is “minimal,” and “since counties usually tend to have residential gross sales than business gross sales, residential values will change, whereas business values stay the identical,” in accordance with the audit. “Consequentially, the tax burden shifts towards residential property homeowners within the county.”

Home Speaker Mike Schultz, R-Hooper — who co-chairs the legislative committee — famous that assessors have been working with trade professionals lately to get extra voluntary knowledge, and requested the auditors how that program has been working.

“What I might say is, I feel a variety of the struggles that also exist are for the extra rural and smaller counties,” mentioned audit supervisor Leah Blevins. “There are various years that they do not have sufficient knowledge to make a change, so the business properties stay the identical.”

Different findings from the audit embody:

• The Property Tax Division has been passive in its oversight function.
• Extra coaching for assessors on mass appraisal will enhance their effectiveness.
• Counties ought to present property homeowners with extra info on their valuation kinds.
• Taxpayers would profit from better readability across the fact in taxation course of.
• County board of equalization processes may benefit from better transparency and uniformity within the appeals course of.

Moreover, auditors suggest lawmakers take into account giving the Property Tax Division the flexibility to undertake “multi-tiered enforcement mechanisms” for counties with differing ranges of compliance and take into account requiring extra transparency from counties relating to property taxes.

The audit was referred to the Income and Taxation Interim Committee and the Enterprise and Labor Committee for research all through the interim.