Glossary of Tax Terms

Updated: 10/15/2010 10:25:17 AM

GLOSSARY OF TAX TERMS

Assessment or Assessed Value:
The value that is placed on a property by the municipal assessor for purposes of taxation. The assessed value is used to determine the property tax amount and may be below the current market value of the property. For more information go to Property Owner's Guide on the Treasurer's homepage.

Average Assessment Ratio:
A ratio determined by the Department of Revenue showing the relationship between the assessed value of all taxable property in a municipality and the equalized value of that property. The average assessment ratio is applied to all property in a municipality regardless of type or location. Assessed value divided by estimated fair market value equals average assessment ratio.

Current Taxes Due: 
Current year property taxes due, Example: 2002 property tax bills are mailed December 2002 and a minimum payment, equal to the first installment, is due by January 31, 2003. Subsequent installment(s) are considered Postponed Taxes. Installments that are not paid or are late put the entire remaining tax bill into a Delinquent status.

Delinquent Taxes:
Property taxes that have not been paid by the due date. Delinquent taxes are subject to 1 ½% penalty accruing monthly on the unpaid tax balance until paid.

Equalized Value:
The estimated market value of all taxable non-agricultural property, both real and personal, plus the use value of agricultural lands in a municipality. The Department of Revenue each year determines the equalized value.

Estimated Fair Market Value: 
A value calculated by dividing the property's assessed value by the municipality's average assessment ratio. This value may not be the actual market value of a property and is not used in the calculation of taxes. Agricultural property value is based on use, not market, thus the estimated fair market value is not calculated for parcels in the agricultural class.

Improvements:
On a real estate property bill, improvements are buildings assessed as part of the property. On a personal property bill, improvements are machinery, furniture and fixtures used to operate the business or buildings on leased land.

IN-REM Fees:
Costs that are incurred by the county during the foreclosure process and are subsequently assessed to properties in the process. The owner must pay all taxes, specials, interest, penalties and in-rem fees to redeem a property once the in-rem process has begun.

IN-REM Process: 
The legal process that is used by the county to take ownership of tax delinquent properties according to Wisconsin Statute 75.521.

Interest:
An extra charge that is added to a delinquent property tax bill. The amount is 1 % simple interest per month on the unpaid taxes and special assessments. Interest is calculated based on the unpaid balance on the first business day of the month.

Lottery and Gaming Credits:
A credit that may be applied to a property tax bill per Wisconsin Statute 79.10. For more details on what properties qualify, go to http://www.revenue.wi.gov/faqs/slf/lottcr.html

Penalty:
An extra charge that is added to a delinquent property tax bill. The amount is 1/2% simple interest per month on the unpaid taxes and special assessments. Penalty is calculated based on the unpaid balance on the first business day of the month.

Personal Property:
This term refers to items such as machinery, furniture, and fixtures used to operate a business. It also refers to buildings on leased land when the lessee owns the buildings.

Postponed Taxes:
The balance due of current year taxes when prior installment(s) are paid by the due dates. Note: If prior installments are not paid or are paid late, the entire remaining tax bill becomes delinquent and subject to interest and penalty charged from the preceding February 1st, per Wisconsin Statute 74.11(11).

Real Property or Real Estate:
This term refers to land and any buildings on that land.

School Levy Tax Credit:
A credit towards property taxes that is state-funded by using income, sales and excise (alcohol and cigarette) taxes.

Special Assessments or Specials:
These are charges added to the tax bill by the local municipality for services provided. Some examples are: delinquent sewer or water bills, trash collection, recycling charges, sidewalks, razing charges, weed and cutting charges, etc.

Tax Base:
The total assessed value of all taxable property in the school district, city, county etc. that are subject to property taxes.

Tax Bill:
The original bill for real estate property taxes or personal property taxes that the municipality sends to the property or business owner's mailing address in December of each year.

Tax Certificate: 
A tax certificate is issued annually on September 1st for all properties that have unpaid current year taxes. It represents a lien on the property on behalf of the county. This is the first step of the tax foreclosure process per Wisconsin Statutes. The certificate must be held by the County for two years before foreclosure action can be started. Payment of the entire delinquency for that tax year voids the certificate.

Tax Exempt:
A term that refers to parcels that are not required to pay property taxes such as government property and churches. Tax exempt properties are still responsible for any special assessments to the property.

Tax Levy:
The total amount of property tax money that an entity (such as school district, city, county, etc.) needs to raise to provide services.

Tax Key Number, parcel Number, or I.D. Number: 
Refers to the unique number that is assigned to each parcel or land in the county. In Waukesha County parcel numbers are 2-4 letters, designating the municipality, followed by 6-10 numbers.

Tax Rate:
The tax levy (as determined by the taxing entity) divided by the tax base.

Tax Roll:
A listing of tax information for every property in the county.

Tax Statement: 
This is a statement that shows delinquent taxes, fees, interest and penalty on a specific parcel. Interest and penalty amounts are valid through the end of the month the statement is mailed. Statements are mailed by Waukesha County in February and August.

Timely Payment:
A tax payment that has been paid on or before the due date.

Use Value Assessment:
An assessment based on the value of the property as it is currently used, not its market value. This only applies to agricultural land.