Erlanger has released its proposed property tax rates for this fiscal year and will vote on them at a special city council meeting on Tuesday, Sept. 8.
The proposed real estate property tax rate is $0.241 per $100 of property valuation. That’s a reduction from last year’s rate of $0.244 per $100 of property valuation. The tangible property tax rate, on the other hand, is going up from $0.178 to $0.195 per $100 of assessed property. Both of the new rates are compensating rates, meaning they will bring in the same amount of revenue as the preceding year.
Real estate property taxes are levied against homes and commercial real estate. Tangible property, on other hand, is taxed against equipment and other movable property, essentially anything that’s not nailed down. Tangible property taxes tend to affect businesses more than residents.
How do property taxes work?
Property taxes are broken down into several categories. The first and usually largest chunk of your tax bill is real property tax, sometimes referred to as real estate property tax. This is essentially a tax on everything you own that’s nailed down. For residents, this means houses and other real estate property. For businesses, this means office buildings and other buildings and facilities used to conduct business.
Tangible personal property, on the other hand, is another form of property that isn’t real estate. Depending on where you live, residents may not be taxed on personal property at all–this will vary by jurisdiction.
Depending on where you live, other tax-adjacent fees may apply.
Finance Director Kara Kramer stated the increase in the compensating rate for tangible property was due to depreciation in the tangible property in businesses throughout the city. This is in contrast to real estate values, which have been going up over the past few years. This also explains the rate increasing, with the depreciating values, the rate would need to increase to draw the same amount of revenue.
“Tangible taxes is not any indication of the economy,” Kramer said. “When I did a big analysis of our tangibles, those assessments are basically down because there’s businesses that have depreciated their equipment, they disposed of different things, they could have inventory in different locations. So, I don’t think it’s any indication of businesses leaving. I think it just fluctuates.”
The city council will perform a first reading on the tax ordinance on Tuesday. They will cast a final vote on the ordinance on Sept. 8.
This story has been updated.
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