Agenda - Council - 07/23/1979 - Laserfiche WebLink

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July ll, 1979 STATE OF MINNESOTA DEPARTMENT OF REVENUE CENTENNIAL OFFIE:E BUILDING SAINT PAUL, MINNESOTA 55~145 PHONE: 296-0995 Mr. Lloyd Schnelle, City Administrator City of Ramsey 15153 Nowthen Boulevard, NW Anoka, Minnesota 55303 Dear M~. Schnelle: This letter is in regard to the questions you raised in our June 29, 1979 telephone conversation. As I understood your questions, you were interested in what differences there might be in the treatment of senior versus non- senior citizens in the calculation of various tax liability and tax credit amounts or allowances. In terms of the property tax, you will note in the following example that there is no difference in the calculation of a senior and a non-senior property owner's tax (for like valued property) except in the determination of the Property Tax Refund (circuit-breaker) amount: Example - Non-Agricultural Property Taxes Payable in 1980 Non-Senior Taxpayer Senior Citizen Taxpayer Household Income Assessor's Market Value Assessment Rates Assessed Value Hypothetical Mill Rate Gross Tax Amount Regular Homestead Credit Property Tax Refund $20,000 $20,000 $50,000 $50,000 18% of First $21,000 and 30% of Excess $12,480 $12,480 100 Mills 100 Mills $ 1,248 $'*1,248 $ 55o $ 55o $ 239 $ 339 Basically, the Property Tax Refund program provides that the state will pay that portion of a homeowner's property taxes which exceed a specific percentage of his househOld income (1.6% at the $20,000 income level)'up to a certain maximum amount (which varies according to the claimant's income) plus 50% of the remaining property taxes up to a second specified maximum amount (which also varies according to income). From the result of these calculations, the regular homestead credit amount is subtracted to obtain the net Property Tax Refund amount. The difference for a senior citizen claimant is that the AN EQUAL OPPORTUNITY EMPLOYER