Special tax assessments

[whataboutzepa]

What is the easiest way to determine which special tax assessments on a property tax bill qualifies for deduction? Some examples are: MEASURE Y 2016, SEWER SANI/STORM, LIBRARY PARCEL TAX, GARBAGE SVC-CURRENT, SCCO VECTOR CONTROL, MOSQUITO ASMT #2, FLOOD CTL DEBT-CENTRAL, MEASURE AA, SCVOSA ASMT # 1, SCVOSA MEASURE T, SAFE, CLEAN WATER

[Terri Lynn]

Hello, whataboutzepa!

Special assessment taxes levied on a property and what they are being used for can be found by searching the records of thr county assessor's office. Unlike general taxes, special assessments that only benefit a specific area rather than an entire municipality are typically not deductible on federal income tax returns. 

Whether or not a special assessment tax is deductible from federal taxes depends on the boundaries of the special assessment district and the nature of the project funded by the tax.

In trying to determine whether it will be deductible or not, the county assessor's will often consider the following:

• If a project is seen as contributing to the benefit of an entire community, it is deductible.
• If it is seen as only contributing to a portion of the community, it is not deductible.
• If a special tax is used to fund maintenance or repairs, it is deductible.
• If the money is used for any other purpose, it is not.

For additional information on similar topics see:  

Claiming Property Taxes on Your Tax Return 

Please feel free to reach backout with any additional questions or concerns you might have!

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[K M W · Accepted solution]

You can deduct on Schedule A (Itemized Deductions) amounts you paid during the year for state and local real estate you own that wasn't used for business, but ONLY if the taxes are assessed uniformly at a like rate on all real property throughout the community, and the proceeds are used for general community or governmental purposes.  Usually you will see these charges on your property tax bill with a "rate" indicated next to the charge - the charge is calculated by taking the value of your home (as shown on the property tax bill) and multiplying it by that rate.

Often times other charges appear on your property tax bill - and many of these are NOT deductible on  your tax return, as they are NOT based on the relative values of properties in your community, or are NOT used for general governmental purposes.  For example, if you and other homeowners in your area are being charged a flat rate for things like trash collection, water, lighting, etc., those are not considered to be assessed uniformly at a like rate across all the properties in your community. In other words, if your house is worth twice the amount of mine, but we pay the same dollar amount for trash collection, that amount is not deductible.  Similarly, you may have charges on your property tax bill that improves the value of your property, such as a local assessment for new sidewalks.  Since these assessments improve the value of your property, they are not considered assessments that are for general community or governmental purposes, and cannot be deducted.  

As for the costs you specifically listed in your question,  I would encourage you to review your property tax bill and first look to see if these costs are assessed at a rate that all houses in your area are assessed at, and then look to see if the charge relates to general community or governmental purposes.  When I look at your list (without being able to see the actual property tax bill to verify), I would guess that the library parcel tax probably is charged based on a uniform rate, and giving it's a library parcel tax, probably meets the rules to be considered general community purposes. However, items like garbage services probably does not change cost based on the relative value of your home vs other homes in the area, so although assessed on the property tax bill, it is not actually a property tax, so cannot be deducted on your tax return.  As for the other items you mentioned, I cannot determine based on their descriptions which would be deductible and which would not, so I would refer you, to review the property tax bill to see if the charge is based on a uniform rate first, and then I would verify with your local tax assessor's office whether any of the descriptions are items that are considered improvements that increase the value of your property (i.e. your locality installed sewers in your subdivision, and the cost of that is being charged to the homeowners in that subdivision through the property tax bill).

So, although I can't answer your question for certainty on the items listed on your specific bill, I hope the explanation provided above gives you the information needed to determine which charges can be deducted and which cannot.