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					     Georgia Department of Revenue


         CAVEAT 2010
Digest Review Breakout Session
             Mark Loyd
           Gregg Reese
           Tracy Thomas
         Georgia Department of Revenue

          Digest Review Session
• DOAA ratio study and review
  – Mark Loyd: mark.loyd@dor.ga.gov
  – 404-290-0172
• Sales Ratio Analysis: FMV vs. MAV
  – Gregg Reese: rgreese@wingap.net
  – 404-309-6434
• DOR digest review
  – Tracy Thomas: tracy.thomas@dor.ga.gov
  – 404-831-0158
 Georgia Department of Revenue



        Caveat 2010


Department of Audits and
       Accounts
  Sales Ratio Study in
        Review
      Georgia Department of Revenue

 Stages of Compiling the Ratio Study
1.   Developing county market factors.
2.   Appraising parcels to supplement sales.
3.   Reviewing and qualifying sales.
4.   Reviewing sales and appraisals with county tax
     office.
5.   Establishing appropriate stratifications and
     compiling final study.
6.   Hand deliver study to appropriate county officials.
        Georgia Department of Revenue

         County Market Factors
• Parcels that sold in the previous year with
  improvements (Residential, Commercial,
  Industrial) are selected to be appraised by
  the DOAA field staff.

• Establish market factor relating DOAA
  appraisals to recent qualified sales
        Georgia Department of Revenue

          County Market Factor
  Parcel sale price
- Land Value
- Accessory Improvement Value
= Improvement Value

Improvement value in relation to appraisal
  value= County Market Factor
        Georgia Department of Revenue



• For counties with few or no sales to
  appraise how is a county market factor
  determined?
• Use all current year sales, review history
  of county sales and comparable
  surrounding counties.
        Georgia Department of Revenue

            Appraisal Samples
• To supplement the study when there are
  not an adequate number of sales within a
  digest class or to compensate for sales
  chasing practices, parcels are randomly
  selected to be appraised by the DOAA
  field staff.
        Georgia Department of Revenue

• Market data is used to confirm validity of
  appraisals.
• Individual appraisal samples carry the
  same weight as qualified sales.
• Number of appraisals tied to the number of
  prior year qualified sales.
• Determined sample size is doubled if sales
  chasing is suspected.
         Georgia Department of Revenue

   Qualification and Review of Sales
• Sales list is given to the assessors office
  for review and comment.

• DOAA staff reads the deeds and security
  deeds for all commercial, industrial,
  agricultural and certain residential sales.
         Georgia Department of Revenue

• All Residential, Commercial and Industrial
  parcels that sold in the prior year that are
  ten acres or greater in size are field
  reviewed.
• All Agricultural parcels that sold in the prior
  year are field reviewed.
• May perform appraisals on Agricultural
  parcels at this time.
       Georgia Department of Revenue

         Agricultural Appraisal
  Ag tract sale price
- Timber Value
- Improvement Values (houses, barns,
   irrigation equipment)
= Land Value
          Georgia Department of Revenue

      Selecting Ag parcel for appraisal

•   Within 5% in size of Sale parcel
•   Similar road frontage
•   Similar road type
•   Similar use (open, wooded, improved)
          Georgia Department of Revenue

                Qualifying Sales
Remember to check for
• Ownership of adjacent parcels
• Related parties (check secretary of state website)
• Non-Market Financing (rates and terms, additional
  property used as collateral)
• Manufactured housing
• Personal Property
• Condition of property changed between sale date and
  January 1st.(Remodel, addition, new house, land use
  changed)
        Georgia Department of Revenue



• Deed Type
Quit Claim
Executor
Administrators
Partial Interest
       Georgia Department of Revenue

Establishing Appropriate Stratifications
• Digest Class of a parcel may be changed
  if it is inconsistent with the use of the
  tract.
• Any digest class with 12 qualified
  samples (sales or appraisals) will stand
  alone.
• Possible groupings include Comm/Ind,
  Ag/Comm/Ind or County total, depending
  on the number of qualified samples.
         Georgia Department of Revenue



• Outliers determined through the
  calculation of interquartile range.
Georgia Department of Revenue
          Georgia Department of Revenue

    Sales Ratio Analysis: FMV vs. MAV
•   Why two different studies/values?
•   How can two different studies be run?
•   Benefits of FMV Ratio Study
•   Benefits of MAV Ratio Study
•   The year 2012
        Georgia Department of Revenue

    Sales Ratio: Why FMV & MAV?
• Current law does not require maintenance
  of 2 values
  – FMV (Fair Market Value)
  – MAV (Moratorium Assessed Value)
• Where a system allows, it probably is a
  good idea to maintain both values
        Georgia Department of Revenue

    Sales Ratio: Why FMV & MAV?
• Certain Property Changes are appraised
  at FMV
  – New properties
    • Parcels
    • Construction
  – Properties with declining values
• These values are placed on the digest
  – Properties added at true FMV provide more
    revenue
        Georgia Department of Revenue

    Sales Ratio: Why FMV & MAV?
• Without FMV study, no confirmation
  schedules are correct
• FMV study provides indications of market
  direction as it relates to appraisal
  schedules
        Georgia Department of Revenue

    Sales Ratio: Why FMV & MAV?
• MAV study provides relationship of frozen
  values to market
• Provides data that can be used to pinpoint
  tax burden shifts
• Project DOAA study results
        Georgia Department of Revenue

How can FMV & MAV studies be done?
• Only possible where FMV and MAV are
  maintained on properties
• System should separate real & inflationary
  growth applying each where appropriate
• User prompts & controls must be in place
  to handle “out-of-norm” situations
        Georgia Department of Revenue

    Sales Ratio: Why FMV & MAV
• Maintenance of both value sets allows
  production of FMV & MAV consolidation
  reports
  – Numerous analytical reports can be derived
    from consolidated data sets
Georgia Department of Revenue
Georgia Department of Revenue
Georgia Department of Revenue
         Georgia Department of Revenue

How can FMV & MAV studies be done?
• Sales Analysis must be configured to
  provide user with ability to select study
  type
  – Accomplished with addition of checkbox
Georgia Department of Revenue
         Georgia Department of Revenue

    MAV vs FMV Ratio Study Demo
• ..\..\..\..\..\caveat\wingap.exe
        Georgia Department of Revenue

How can FMV & MAV studies be done?
• Ratio calculations must be adjusted based
  on user selection
  – MAV Ratio = (MAV x .4) / Sales Price
  – FMV Ratio = (FMV x .4) / Sales Price
  – Aggregate ratios sum MAV assessments &
    FMV assessments based on selection
        Georgia Department of Revenue

      Benefits of FMV Ratio Study
• Provides county with a means of following
  market & its relationship to appraisals
• Appraisers provided direction with regard
  to schedule adjustments
• Used to demonstrate effect of MAV
• Used in appeal to DOR regarding digest
  approval (prior to SB346)
        Georgia Department of Revenue

      Benefits of MAV Ratio Study
• Status of county digest with regard to
  DOAA study
• In conjunction with FMV study,
  demonstrate to property owners effects of
  moratorium on distribution of tax burden
        Georgia Department of Revenue

  Benefits of Maintaining MAV & FMV
• Following graphs depict a before & after
  situation with a rural land reval
• MAV/FMV were the same before reval
          Georgia Department of Revenue

    Benefits of Maintaining MAV & FMV
•   Res/Comm/Ind Level of Assmt acceptable
•   Ag Use Level of Assmt low (23.00)
•   After reval Ag Use land values increased
•   With MAV tax burden shows no shift
•   Under FMV tax burden shifts from non-Ag
    to Ag
 Georgia Department of Revenue

Digest %: MAV vs FMV (reval)
 Georgia Department of Revenue

Digest %: MAV vs FMV (SV/SJ)
      Georgia Department of Revenue

Distribution of Tax $: MAV vs FMV (reval)
      Georgia Department of Revenue

Distribution of Tax $: MAV vs FMV (reval)
       Georgia Department of Revenue

Distribution of Tax $: MAV vs FMV (SV/SJ)
         Georgia Department of Revenue

     Digest Value from Sales Price
• SB346 states that for parcels that sale, the
  parcel value shall not exceed sales price
  – Effective for 2011 digest
  – Sale must be an arms length transaction
  – Sales price must be adjusted for non-real
    estate value (timber, personal property, etc)
  – Sales price value in place for 1 year
        Georgia Department of Revenue

     Digest Value from Sales Price
• User should be prompted during data
  entry when adjusted sales price of a valid
  sale is less than parcel value (MAV)
• User can flag sale as “digest value”
        Georgia Department of Revenue

     Digest Value from Sales Price
• Breakdown of digest value for flagged
  sales
  – parcel‟s land value will be assigned to a sales
    land value field
  – Land value will be subtracted from adjusted
    sales price with results stored in sales
    improvement value field
  – New construction will be added to
    improvement value field
         Georgia Department of Revenue

     Digest Value from Sales Price
• Maintenance of Value
  – List of parcels with sales price digest values
    will be generated
  – User will be prompted to remove sales price
    digest values
  – Ratio studies designed to use sales price
    value or MAV or FMV
        Georgia Department of Revenue

             The Year 2012
• In 2012, moratorium on value increases
  will be lifted
• Counties must be prepared to generate
  FMV after lifting of moratorium
• Dual value maintenance over moratorium
  period removes pressure of an “overnight”
  revaluation
        Georgia Department of Revenue

      DOR Digest Review Topics
• Basic Compliance Statistics
• Clipping Techniques – past and present
• DOAA sales-chasing detection and
  adjustment/correction
• Evaluation and determination of penalties
• New thoughts and ideas concerning digest
  review
        Georgia Department of Revenue

         Basic Compliance Stats
• State regulations require all property on
  the digest listed using a two-digit code
• 1st Digit = Classification
• 2nd Digit = Strata
        Georgia Department of Revenue

         Digest Classifications
•   A                  •   T
•   B                  •   U
•   C                  •   V
•   H                  •   W
•   I                  •   F
•   P                  •   J
•   R
           Georgia Department of Revenue

             Digest Classifications
•   A – Agricultural      •   T – Res. Transitional
•   B – Brownfield        •   U – Utility
•   C – Commercial        •   V – Conservation use
•   H – Historic          •   W – Envir. Sensitive
•   I – Industrial        •   F – FLPA Base Value
•   P – Preferential      •   J – FLPA CU Prop
•   R - Residential
        Georgia Department of Revenue

             Digest Reviews
• DOR uses statistics from Department of
  Audits
• Property grouped into five homogeneous
  groups
  – RES (includes Res Trans and Historic)
  – AGR (includes Pref, CUV, Env.Sens, FLPA)
  – COM
  – IND (includes Brownfield)
  – UTILITY
         Georgia Department of Revenue

  Basic Stats for Digest Compliance
• Level of Assessment
  – Measure of Central Tendency
  – 36% - 44%
  – 95% Confidence Intervals
• Uniformity of Assessment
  – Coefficient of Dispersion
    • RES = 15% or less
    • Non-RES = 20% or less
         Georgia Department of Revenue

   Basic Stats for Digest Compliance
• Assessment Bias
• Here the dominos begin to fall
  – DOR: 95% - 110%
  – DOAA: 98% - 103%
  – The plus is important
     • 30 samples minimum
     • Spearman Rank p-value
       less than 0.0100
        Georgia Department of Revenue

     Measure of Central Tendency
• DOR uses the Median Ratio when
  assessment bias is determined to be
  insignificant
  – Insignificant = PRD between 0.95 and 1.10,
    inclusive
• DOR uses Aggregate Ratio when
  assessment bias is significant.
        Georgia Department of Revenue

     Measure of Central Tendency
• DOAA uses the aggregate ratio as the
  measure of central tendency when:
  – Must have 30 samples
  – PRD falls outside of .98 – 1.03
  – P-value of Spearman Rank is less than
    0.0100
        Georgia Department of Revenue

                  P-Value?
• “A small p-value indicates a strong
  justification of rejection”
  – Statistics Principles and Methods by Richard
    Johnson/Gouri Bhattacharyya




• Small p-value indicates the results are
  statistically very trustworthy
Georgia Department of Revenue

    Spearman Rank
               • The spearman rank test
                 is performed to test the
                 probability (likelihood)
                 that the measured bias
                 happened by shear
                 chance or luck.
               • When the p-value is less
                 than 0.01 statistically
                 there is almost no chance
                 the tested results are
                 wrong
         Georgia Department of Revenue

What does Spearman Rank measure?
• Correlation
• How is the dependent
  variable (y) impacted
  by changes in the
  independent variable
  (x)
• X = Value
• Y = Ratio
           Georgia Department of Revenue

                 Spearman Rank
• When the ratio is highly correlated (directly or
  indirectly) with the value, the probability of
  assessment bias increases.
• Example:
   – value decreases, ratio increases (indirect correlation)
   – value increases, ratio increases (direct correlation)
• Spearman Rank measures this correlation
Georgia Department of Revenue

    Clipping Samples
               • DOR [really] old days:
                 20% and 80%
               • DOAA old days: 10%
                 and 70%
               • New DOAA/IAAO:
                  – Interquartile Range
         Georgia Department of Revenue

             Clipping Samples
• Department of Audit trim limits for outlier
  ratios using 2007 Ratio Study Standard
  from IAAO
• Using the Interquartile range (IRQ)
           Georgia Department of Revenue

           Interquartile Range Steps
• Locate the first quartile
  point
• Locate the third quartile
  point                     100%
• Compute the interquartile 80%
  range
                             60%
• Establish the lower
  boundary                   40%

• Establish the upper        20%
  boundary                    0%
                                   1
       Georgia Department of Revenue
Rank                  Ratio
1                     0.611
2                     0.756
3                     0.762
4                     0.853
5                     0.867
6                     0.909
7                     0.925
8                     0.944
9                     1.014
10                    1.052
11                    1.178
12                    1.367
13                    1.850
14                    2.500
              Georgia Department of Revenue

          Locate the first quartile point
• (0.25 x number of ratios) + 0.25
• Example
   –   (0.25 * 14) + 0.25
   –   (3.5) + 0.25 = 3.75
   –   3.75 is three quarters between the third and fourth ranked ratios
   –   Ratio 3 = 0.762
   –   Ratio 4 = 0.853
   –   ¾ between = (0.853-0.762)*.75=0.068
• First Quartile point
   – 0.762 + 0.068 = 0.830
             Georgia Department of Revenue

         Locate the third quartile point
• (0.75 x number of ratios) + 0.75
• Example
   –   (0.75 * 14) + 0.75
   –   (10.5) + 0.75 = 11.25
   –   11.25 is one quarter between the 11th and 12th ranked ratios
   –   Ratio 11 = 1.178
   –   Ratio 12 = 1.367
   –   ¼ between = (1.367-1.178)*.25=0.047
• Third Quartile point
   – 1.178 + 0.047 = 1.225
          Georgia Department of Revenue

        Compute Interquartile range
• The distance between
  the first and third
  quartile = interquartile   100%
  range                      80%
• 1.225 – 0.830 = 0.395      60%

                             40%

                             20%

                              0%
                                    1
         Georgia Department of Revenue

        Establish Lower Boundary
• Lower Trim Point
  – First Quartile – (IQR x 1.5 or 3.0)
  – 0.830 – (0.395 x 1.5) = 0.238
  – 0.830 - .5925 = .2375

  – 0.830 – (0.395 x 3.0) = -0.355
  – 0.830 – 1.185 = -0.355
         Georgia Department of Revenue

        Establish Upper Boundary
• Upper Trim Point
  – Third Quartile + (IQR x 1.5 or 3.0)
  – 1.225 + (0.395 x 1.5) = 1.818
  – 1.225 + .5925 = 1.818

  – 1.225 + (0.395 x 3.0) = 2.410
  – 1.225 + 1.185 = 2.410
        Georgia Department of Revenue

             Example Results
• Only those ratios outside the lower and
  upper boundaries will be clipped from the
  sample
• Normal Outliers (1.5 factor) {.238 – 1.818}
  – Ratio 13 = 1.850
  – Ratio 14 = 2.500
• Extreme Outliers (3.0 factor) {-.355 – 2.41}
  – Ratio 14 = 2.500
         Georgia Department of Revenue

  Sales Chasing: Detection and Correction
• Detection involves the testing of sold vs.
  unsold parcels within various
  homogeneous groups (RACI)
• When treatment of sold vs. unsold parcels
  is different, correction of that treatment is
  made and stats are recalculated.
        Georgia Department of Revenue

        Sales Chasing: Detection
• Step 1 – Ratio Distribution Test
• Unexpected ratio distribution is defined as
  having more than 25.10% of ratios within
  +/- 2% of Median Ratio
          Georgia Department of Revenue

      Sales chasing Detection: Step 1
•   Number of Sales:             164
•   Median:                      39.28
•   Lower Boundary:              38.49 (-2%)
•   Upper Boundary:              40.07 (+2%)
•   Expected # within +/- 2%:    41
•   Actual # within +/- 2%:      61
•   Step 1 Flag?                 YES
        Georgia Department of Revenue

   Sales Chasing Detection: Step 2
• For counties flagged in Step 1
• Chi-Square test is performed to compare
  the number of sold and unsold properties
  with percent value changes that
  – Increased
  – Decreased
  – Remained unchanged
        Georgia Department of Revenue

    Sales Chasing Detection: Step 2
• Homogeneous Groups (RACI) will be
  tested separately if a minimum of 30
  qualified sales exist
• Commercial and Industrial property class
  will be combined if necessary to achieve a
  minimum sample of 30 sales
        Georgia Department of Revenue

    Sales Chasing Detection: Step 2
• The two-tailed test with a p-value less than
  0.01 will be declared significant
         Georgia Department of Revenue

    Sales Chasing Detection: Step 3
• For counties flagged
  in Step 1 & Step 2
• Mann-Whitney test
  will be performed to
  compare percent
  value changes for
  sold and unsold
  properties.
        Georgia Department of Revenue

    Sales Chasing Detection: Step 3
• Homogeneous Groups (RACI) will be
  tested separately if a minimum of 30
  qualified sales exist
• Commercial and Industrial property class
  will be combined if necessary to achieve a
  minimum sample of 30 sales
• The two-tailed test with a p-value less than
  0.01 will be declared significant
        Georgia Department of Revenue

    Sales Chasing Detection: Step 4
• For counties where any of the
  homogeneous groups (RACI) has:
  – Minimum of 30 samples
  – Unexpected Distribution of Ratios within +/-
    2%
  – Significant p-values from both the Chi-Square
    and Mann-Whitney test
• The digest will be corrected.
         Georgia Department of Revenue

        Sales Chasing Correction
• Corrective actions will be to adjust
  assessments for the sold properties to
  reflect the conditions found to exist for the
  unsold properties.
• Two corrections:
  – Distribution of Assessments
  – Magnitude of Assessments
        Georgia Department of Revenue

        Sales Chasing Correction
• Once it has been determined sales
  chasing has occurred, the operational
  basis is that sold properties were treated
  differently than unsold properties.
• The adjustment process removes the
  effects of that differential treatment
         Georgia Department of Revenue

        Sales Chasing Correction
• Sold and Unsold parcels are categorized
  into three categories
  – Increased
  – No Change
  – Decreased
• The sold properties are adjusted to force
  their distribution to match the distribution
  of the unsold parcels
            Georgia Department of Revenue

            Sales Chasing Correction
 Sold Parcels    Number    %       Change     Median % Change
     400          200     50.0%   Increased        25%
                   50     12.5%   No Change         0%
                  150     37.5%   Decreased        -3%



Unsold Parcels   Number    %       Change     Median % Change
   20,000        2,000    10.0%   Increased         5%
                 16,000   80.0%   No Change         0%
                 2,000    10.0%   Decreased        -1%
        Georgia Department of Revenue

Sales Chasing Correction – Distribution
• Step 1 is to make sold distribution match
  the unsold distribution
  – Sold % increased is 50.0% is adjusted to 10%
  – Sold % N/C is 12.5% is adjusted to 80%
  – Sold % decreased is 37.5% is adjusted to 10%


• How is it adjusted? Excellent Question …
          Georgia Department of Revenue

         Sales Chasing Correction
• 400 sold parcels
  – Starting point is all sales go back to previous value
  – 10% = 40 sales
  – Using the 200 sales that increased, 40 properties are
    selected at random.
  – The median % change for unsold increased
    properties = +5%                          Typo in book
  – These 40 sales are increased +5%
  – Remaining 160 parcels (200-40=160) will remain at
    previous value in the corrected ratio study
         Georgia Department of Revenue

         Sales Chasing Correction
• 400 sold parcels
  – Starting point is all sales go back to previous value
  – 10% = 40 sales
  – Using the 150 sales that decreased, 40 properties are
    selected at random.
  – The median % change for unsold decreased
    properties = -1%                          Typo in book
  – These 40 sales are decreased -1%
  – Remaining 110 parcels (150-40=110) will remain at
    previous value in the corrected ratio study
            Georgia Department of Revenue

   Sales Chasing Correction Exercise
                                                  # Randomly
 Sold Parcels    Number   % from Unsold Below        Selected
     300          150             10%            Calculate me!
                   50             80%            Calculate me!
                  100             10%            Calculate me!



Unsold Parcels   Number     %       Change      Median % Change
   20,000        2,000    10.0%    Increased         18%
                 16,000   80.0%   No Change           0%
                 2,000    10.0%   Decreased           2%
        Georgia Department of Revenue

        Sales Chasing Correction
• Now that the distribution and amount of
  increases and decreases match the
  conditions found in the unsold parcels, the
  sold and unsold properties are no longer
  treated any differently.
• The sales ratio calculations are repeated
  to determine the final statistics to be used
  and forwarded to DOR
         Georgia Department of Revenue

              Digest Penalties
• 2010
  – No Penalties (SB 346)
• 2011
  – No Penalties (SB 346)
• 2012
  – its on like donkey-dong
           Georgia Department of Revenue

         Digest Additional State Tax
•   2010 – None due to SB 346
•   2011 – None due to SB 346
•   2012 – ¼ mill reduced to .20
•   2013 – reduced to .15
•   2014 – reduced to .10
•   2015 – reduced to .05
•   2016 – no state levy will exist
      Georgia Department of Revenue

Digest Penalties – What‟s the trigger?
        Georgia Department of Revenue

  Digest Review Statistical Tests
Class        LEVEL     UNIFORM          BIAS

 R

 A

 C

  I
        Georgia Department of Revenue

              Digest Penalties
• 48-5-346
• If county digest for preceding review year
  was conditionally approved and DOR
  conditionally approves the digest in the
  next digest review year
• DOR will
  – Penalize $5 per taxable parcel
  – Withhold road & appraisal staff grants
          Georgia Department of Revenue

                 Digest Penalties
       2010 Digest               2013 Digest
Class     Stat     Value   Class    Stat    Value
 RES     MED       34.43   RES      MED     35.78

• 2010 digest contained a deficiency in
  Residential Level of Assessment
• 2013 digest contained a deficiency in
  Residential Level of Assessment
• Both digest contain the same deficiency
           Georgia Department of Revenue

                  Digest Penalties
       2010 Digest                   2013 Digest
Class      Stat     Value      Class      Stat     Value
 RES       MED      34.43      RES       COD       22.45
• 2010 digest contained a deficiency in Residential Level
  of Assessment
• 2013 digest contained a deficiency in Residential
  uniformity
• Both digest contain deficiencies, but not the same
  deficiency
        Georgia Department of Revenue

            Hidden „Penalties‟
• Loss in public utility revenue due to
  equalized ratio.
• Public utilities, by Federal law, must be
  assessed at „substantially the same level‟
• DOR calculates an equalized ratio for this
  purpose.
• Weighted Average Level of Assessment
        Georgia Department of Revenue

       Equalized Ratio Time Line
• August 1st, 2010
  – County Submits Digest
• July 1st, 2011
  – DOAA Delivers Ratio Results (Stage 6)
• ????, 2011
  – DOR Calculates and proposes Equalized
    Ratio for 2011 digest based on 2010 ratios
  – County elects to either use proposed ratio or
    calculates their own
         Georgia Department of Revenue
  Proposed Public Utility Equalization
               Ratios
• Round to 40% if the calculated equalized ratio is
  between 38% and 42%.
• Use actual calculated equalized ratio if it does
  NOT fall between 38% and 42%.
• Calculated = 38.43% >> Final = 40.00%
• Calculated = 37.22% >> Final = 37.22%
• Calculated = 41.67% >> Final = 40.00%
• Calculated = 42.34% >> Final = 42.34%
          Georgia Department of Revenue
Calculation of Equalized Ratio for Public
           Utility Assessment
Digest           Ass‟d            Projected
  Class          Value    Ratio       FMV
 RES
 AG
 COM
 IND
          Georgia Department of Revenue
Calculation of Equalized Ratio for Public
           Utility Assessment
Digest           Ass‟d          Projected
  Class          Value    Ratio     FMV
 RES         45,252,150
 AG          25,150,500
 COM         58,665,224
 IND         24,808,990
          Georgia Department of Revenue
Calculation of Equalized Ratio for Public
           Utility Assessment
Digest           Ass‟d             Projected
  Class          Value     Ratio       FMV
 RES         45,252,150   .4000
 AG          25,150,500   .3200
 COM         58,665,224   .3500
 IND         24,808,990   .3500
          Georgia Department of Revenue
Calculation of Equalized Ratio for Public
           Utility Assessment
Digest           Ass‟d               Projected
  Class          Value     Ratio         FMV
 RES         45,252,150   .4000    113,130,375
 AG          25,150,500   .3200     78,595,313
 COM         58,665,224   .3500    167,614,926
 IND         24,808,990   .3500     70,882,829
          Georgia Department of Revenue
Calculation of Equalized Ratio for Public
           Utility Assessment
Digest           Ass‟d                Projected
  Class          Value      Ratio         FMV
 RES         45,252,150    .4000    113,130,375
 AG          25,150,500    .3200     78,595,313
 COM         58,665,224    .3500    167,614,926
 IND         24,808,990    .3500    70,882,829
             153,876,864
          Georgia Department of Revenue
Calculation of Equalized Ratio for Public
           Utility Assessment
Digest           Ass‟d                Projected
  Class          Value      Ratio         FMV
 RES         45,252,150    .4000    113,130,375
 AG          25,150,500    .3200     78,595,313
 COM         58,665,224    .3500    167,614,926
 IND         24,808,990    .3500     70,882,829
             153,876,864            430,223,443
         Georgia Department of Revenue
Calculation of Equalized Ratio for Public
           Utility Assessment
Digest          Ass‟d             Projected
 Class          Value      Ratio      FMV
RES         45,252,150    .4000 113,130,375
AG          25,150,500    .3200 78,595,313
COM         58,665,224    .3500 167,614,926
IND         24,808,990    .3500 70,882,829
            153,876,864   .3577 430,223,443
        Georgia Department of Revenue

 Overall Ratio for Additional State Tax
• Annually, regardless of digest review year,
  DOR calculates the overall ratio
• Used in determination of levy of additional
  state tax.
• Ceases in 2016
• How is overall rate calculated?
         Georgia Department of Revenue
  Calculation Overall Average Level of
              Assessment
Digest        Ass‟d               Projected
 Class        Value     Ratio         FMV
RES       45,252,150   .4000    113,130,375
AG        25,150,500   .3200     78,595,313
COM       58,665,224   .3500    167,614,926
IND       24,808,990   .3500     70,882,829
          Georgia Department of Revenue
   Calculation Overall Average Level of
               Assessment
Digest          Ass‟d            Projected
  Class         Value    Ratio       FMV
 RES        45,252,150 .4000 113,130,375
 AG         25,150,500 .3200 78,595,313
 COM        58,665,224 .3500 167,614,926
 IND        24,808,990 .3500 70,882,829
 PU         14,500,225 .3400 42,647,721
          Georgia Department of Revenue
   Calculation Overall Average Level of
               Assessment
Digest          Ass‟d               Projected
  Class        Value     Ratio          FMV
 RES       45,252,150   .4000    113,130,375
 AG        25,150,500   .3200     78,595,313
 COM       58,665,224   .3500    167,614,926
 IND       24,808,990   .3500     70,882,829
 PU        14,500,225   .3400     42,647,721
          168,377,089              472,871,164
          Georgia Department of Revenue
   Calculation Overall Average Level of
               Assessment
Digest          Ass‟d          Projected
  Class        Value    Ratio      FMV
 RES       45,252,150 .4000 113,130,375
 AG        25,150,500 .3200 78,595,313
 COM       58,665,224 .3500 167,614,926
 IND       24,808,990 .3500 70,882,829
 PU        14,500,225 .3400 42,647,721
          168,377,089 .3561 472,871,164
         Georgia Department of Revenue

           Additional State Tax
• Additional State Tax, by definition, will be
  equal to the difference between
  – The amount of state tax actually received
  – The amount of state tax that would have been
    received had the digest‟s assessment level
    actually been at 40%
          Georgia Department of Revenue

      Additional State Tax Example
Actual 1/4 Mill            Should‟ve Been
 Overall Avg Level of      Digest Assmt =
  Assessment = .3576         168,377,089
 Digest Assmt =            168,377,089 / .3576 x .40
  168,377,089                = 188,341,263
 168,377,089 x .00025 =    188,341,263 x .00025 =
  42,094.27                  47,085.32
                           Additional State Tax =
                             47,085.32 - 42,094.27
                             = 4,991.05
         Georgia Department of Revenue

            Actual Calculations
• quarter-mill-pts.xls
Georgia Department of Revenue

        Questions

				
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