Steps for Calculating Commercial Property Tax

Prior to the April tax deadline, you may be interested in finding your property's tax value. If the mammoth tax code is staring you in the face, daring you to read it and calculate your own commercial property tax loan, do not worry; there are easier ways to find your tax rate without wading through the highly technical and confusing areas of tax law. In fact, with these simple steps, you can calculate your commercial property taxes quickly and painlessly. 

1. You must determine the taxable market value of your commercial property. Your tax appraiser should have prepared and mailed this figure to you. However, if you do not have it on hand, you can contact your local appraiser’s office for an additional copy of the value.

2. You need to calculate the total tax capacity of your commercial property based on its location. To find the total tax capacity, you will need to know the appropriate statutory class rate of your property as set by your state legislature. You will need to contact your local treasurer’s office to determine this figure.

3. While you are in contact with your local treasurer’s office, you will also need information about other local tax rates and ratios in order to figure your property tax. In addition to the figures you have already gathered, you will need to know:

• fiscal disparity ratio 
• tax capacity rate 
• market value rate
• state tax rate
• fiscal disparity rate
• state tax rate

These amounts are typically given in percentages that you can use to enter into the commercial property tax calculation formula.

4. Now that you have all the figures that you need to calculate your commercial property tax, you can begin the mathematical formula. First, you need to determine the fiscal disparity tax capacity. To do this, multiply the total tax capacity by the fiscal disparity ratio. This gives you the fiscal disparity tax capacity.

5. Take your total tax capacity again, and subtract the fiscal disparity tax capacity that you just found in step 4. This creates the local tax capacity of your property. 

6. Use the local tax capacity of your property and multiply if by the tax capacity rate provided by your local treasurer’s office. Your product is the tax capacity tax.

7. Multiply the market value of your property that you learned for the appraiser by the market value rate provided by your treasurer’s office. This product is the market value tax.

8. Multiply the fiscal disparity rate by the fiscal disparity tax capacity you found in step four. Your product this time is called the fiscal disparity tax.

9. You need to determine your state tax by multiplying the total tax capacity by the state tax rate, which is uniform throughout your state. This will give you the state tax on your property.

10. Finally, once you have found all of these new figures, you are ready to calculate your total commercial property tax. Add together your tax capacity tax, your market value tax, your fiscal disparity tax, and your state tax. This will give you the total commercial property tax.

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