New National Effective Property Tax Study

Local governments and schools depend upon property taxes as a major revenue source. Businesses look at property tax rates as a site selection factor. The Lincoln Institute of Land Policy recently released a report (PDF) that compares effective property tax rates (total tax divided by total property value) across the 50 states and the District of Columbia. The report covers both urban and rural areas and includes data on residential, commercial, and industrial property taxes. Only one non-metro county or city was included from each state. Bryan, Ohio was the non-metro representative from Ohio. Ashtabula County is not included in the study.

This study is most useful when used in connection with other information about state and local tax structures. Some locations have relatively high property tax levies because those local governments are more dependent on “own-source” revenue (revenue they raise themselves) or have limited non-property tax options available to them. Other states have higher income and
sales taxes in part to finance a greater share of the cost of local government. Also, the property tax on a selected class of property may be relatively high or low due to state or local policies designed to redistribute property tax burdens across the classes of property through exemptions, differential assessment rates, or other classification schemes.


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