How the Levy is Calculated

How the Levy is Calculated

  • Each taxing jurisdiction is responsible for calculating their levy. This is the amount of revenue the jurisdiction needs to generate from property taxes to fund their operations for the year.
    • Total Expenditures – Non-Property Tax Revenue = Levy
  • The levy is spread amongst all properties based on their tax capacity. This number is computed by multiplying the taxable market value (determined by the Assessor’s Office) against the class rate, a figure set by the State of Minnesota.
    • Taxable Market Value x Class Rate = Tax Capacity
  • The local property tax rate is calculated by multiplying the levy by the total tax capacity for that taxing jurisdiction.
    • Levy/Total Tax Capacity = Local Property Tax Rate
  • This rate is then multiplied by the tax capacity for each individual parcel to determine the amount of property tax payable for each parcel.
    • Local Property Tax Rate x Tax Capacity = Property Tax Payable
  • This computation is repeated for each taxing jurisdiction – county, city, township, school, etc. The total amount is due and payable in two installments each year.

This is a basic explanation of the property tax calculation process as it relates to taxes levied based on net tax capacity. This does not account for credits, exclusions, market value taxes, special assessments, or any other unique programs that would impact the total amount due and payable each year. Minnesota has one of the most-complicated property tax systems in the country. While this allows for unique programs to lessen and shift the property tax burden on certain parcels, it can sometimes be difficult to understand or compare one parcel or one taxing jurisdiction to another.