Previous instructions in Commissioner’s Memo number COM-08-129, dated April 15, 2008, related to the January 8th coding of Property Tax Relief Distribution were incorrect due to miscommunication of information.
The State Treasurer’s January 8th distribution of Property Tax Relief to County Treasurers SHOULD be recorded as 40% pullback (revenue code 11125 or 11120). Listed below is information obtained from the State Treasurer’s Office.
1.Counties provide three certifications as to the amount of Homestead Exemption ($350) for each calendar year. Those certifications are dated March 31, June 30, and November 15 and pertain to the previous calendar year's assessment for taxes payable in the current calendar year. Therefore, the final certification for the 2006 assessment year was November 15, 2007.
2. The State Treasurer's Office receives the 1/2 cent sales tax that funds the Homestead Exemption-Property Tax Relief revenue.
3.Each month, the State Treasurer's Office distributes the previous month's sales tax collections based on each county's pro-rata share of certified Homestead Exemptions.
4. During the calendar year, the sales tax collection normally exceeds the certified Homestead Exemption amount. Once the certified Homestead Exemption amount is paid, no additional distributions are made. Based on the June 30, 2007, certifications, final distributions occurred in August of 2007. However, the November 15, 2007, final certification caused additional and final distributions to occur in December 2007.
5. Per Act 1892 of 2005, 1% of any remaining Property Tax Relief sales tax receipts on hand in the State Treasurer's Office at December 31st go to the County Assessors. That 1% is included in the January distribution to counties.
6. January of 2006 was the first time there was a January distribution of Property Tax Relief and this was due to Act 659 of 2005. According to Act 659 of 2005, the State Treasurer's Office must distribute Property Tax Relief Sales Tax to the counties in January, February and March based on the previous November's certifications. The April-June distributions are based on the March 31st certifications. The July-November distributions are based on the June 30th certifications, and the December distribution is based on the November 15th certifications. During the calendar year, each county will receive by December 31st the amount shown on the final November 15th certification.
7. The January distribution from the State Treasurer to the County Treasurer is the first distribution applicable to the new year. Therefore, the January 8, 2008, distribution from the State Treasurer applies toward the Homestead Exemptions applicable to the 2007 assessments for taxes payable in 2008. THAT DISTRIBUTION, WHEN RECEIVED BY DISTRICTS, SHOULD BE APPLIED TO 40% PULLBACK (REVENUE CODE 11125 OR 11120), NOT CURRENT YEAR PROPERTY TAXES.
Property Tax Relief revenue districts receive from the County Treasurer in January will LIKELY be the first distribution of the new year and should be considered 40% Pullback. It is possible, if the State Treasurer and/or County Treasurer make a late December distribution, school districts COULD receive the State Treasurer's December distribution in January, and that distribution should be recorded as current year rather than 40% Pullback. For any Property Tax Relief received in the month of January, the County Treasurer should be contacted to confirm if it was distributed by the State Treasurer in December or January in order to accurately code the revenue.