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Counties Worried About Tax Credit Assessments

By Evelina Burnett | Published 23 Oct 2013 06:00am | comments
A recent Mississippi Supreme Court ruling could have a major impact on tax collections across the state. MPB’s Evelina Burnett reports the decision affects the way some properties that received federal tax credits are assessed.
 
The state supreme court ruled that tax-credit properties will need to be assessed using a method set out in a 2005 state law – it excludes federal tax credits and instead uses the properties income to determine the value. These properties are all over the state but many were built on the coast after Hurricane Katrina. Jackson county tax assessor Benny Goff says his county has 13. Here’s one example of the difference between the two assessment methods:
 
"There's a $14 million complex here and using the tax credits, we valued it at $9 million," said Goff. "Without using the tax credits, it's going to be $280,000. The difference being, they'll pay $2,000 a year in taxes, versus $68,000."
 
The Mississippi Association of Supervisors says the income-based assessment method will cost counties, cities and school districts across the state millions of dollars.  But affordable housing advocates say the tax-credit program requires developers to keep rents low for decades.
 
"If they paid the full cost of the property, that would be cost-prohibitive because the income that they get from the property is lower than it would be at market value," said Beth Orlansky with the Mississippi Center for Justice, which submitted a brief in the case on behalf of low-income families who need affordable housing in the state. She says a middle ground should be found, between properties paying the full value and those paying virtually no taxes, but the Mississippi legislature would have to change the statute for that to happen.

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