1. New Hampshire Municipal Tax Rates: How Are They Calculated
New Hampshire Municipal Tax Rates: How Are They Calculated? And How Do They Change? March 27, 2017
Stephan W. Hamilton, Director Municipal & Property Division
NH Department of Revenue Administration
John T. Beardmore, Commissioner
Lindsey M. Stepp, Assistant Commissioner
109 Pleasant Street, Concord, NH 03301

2. New Hampshire Municipal Tax Rates
Rick Evans, Timber Tax Appraiser, Municipal and Property Division
New Hampshire Municipal Tax Rates
This presentation is intended for informational purposes only, and is not a substitute for seeking professional advice or for reviewing the applicable laws and rules. This presentation represents some positions of the Department on the limited issues discussed herein, based on the law in effect at the time of the presentation and Department interpretation thereof, as well as the opinions and conclusions of its presenter.
For the current status of any tax law, practitioners and taxpayers should consult the source documents (i.e., Revised Statutes Annotated, Rules, Case Law, Session Laws, etc.) for independent verification.
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3. Stephan W. Hamilton, Director, Municipal & Property Division
Presentation Goals
Demonstrate the calculation which determines local tax rates calculated for each community.
Understand basic formula of statewide tax rate calculation.
Review the source of information for each calculation.
Identify the elements that compose a local tax rate for a city or town, including:
Local municipal tax rate
County tax rate
Local school tax rate
State education tax rate
Review how changes in total tax commitments and assessed value can affect the calculation of the rate.
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4. Setting of Tax Rates by Commissioner
Stephan W. Hamilton, Director, Municipal & Property Division
Setting of Tax Rates by Commissioner
RSA 21-J:3, XV Establish and approve tax rates as required by law. RSA 21-J:35 I The commissioner of revenue administration shall compute and establish the tax rate of each town, city, or unincorporated place.
Why does the DRA have to set the rates?
Isn’t this something that the towns could do on their own?
The following presentation may provide a lot of background on why that might not be practical!
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5. Establish 1,150 Property Tax Rates
Stephan W. Hamilton, Director, Municipal & Property Division
Establish 1,150 Property Tax Rates
259 Local municipal tax rates
259 School tax rates
259 State education tax rates
259 County tax rates
114 Village districts tax rates
Total of 1,150 individual tax rates
Accuracy rate: 99.91%
Review 6,500 tax rate documents
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6. Stephan W. Hamilton, Director, Municipal & Property Division
Basic Process
The tax rate for each community is constructed from locally derived financial data.
Each city or town’s rate is composed of a minimum of four components:
Local municipal tax rate
County tax rate
Local school tax rate
Statewide education tax rate
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7. Basic Process (Continued)
Stephan W. Hamilton, Director, Municipal & Property Division
Basic Process (Continued)
Depending on the complexity of the city or town, there may be more components:
Cooperative school districts
Village districts
Three basic elements for each component:
Total gross appropriation
Estimated revenues
Total locally assessed values
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8. Simple Formula! (Appropriations – Estimated Revenues)
Stephan W. Hamilton, Director, Municipal & Property Division
Simple Formula!
(Appropriations – Estimated Revenues)
Total Locally Assessed Values
MS-4
MS-2
MINUS
Adjustments to appropriations, etc
MS-1
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9. Stephan W. Hamilton, Director, Municipal & Property Division
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10. Stephan W. Hamilton, Director, Municipal & Property Division
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11. Calculating Municipal Tax Rate per $1,000/value
Stephan W. Hamilton, Director, Municipal & Property Division
Calculating Municipal Tax Rate per $1,000/value
Gross Appropriations
less Revenues (not including fund balance)
less Fund Balance Voted
less Fund Balance to Reduce Taxes
plus War Service Credits
plus Overlay
divided by
Locally Assessed Property Valuation
(per line 21 of MS-1) x 1,000
= Municipal Tax Rate per 1,000
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12. Municipal Tax Rate Page 12
Stephan W. Hamilton, Director, Municipal & Property Division
Municipal Tax Rate
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13. County Rate County Net Appropriation
Stephan W. Hamilton, Director, Municipal & Property Division
County Rate
County Net Appropriation
x town’s previous year equalized value as % of total county
= Town’s County Assessment
divided by
Locally Assessed Property Valuation
(per line 21 of the MS-1) x 1,000
= County Tax Rate per 1,000
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14. County Apportionment Page 14
Stephan W. Hamilton, Director, Municipal & Property Division
County Apportionment
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15. Stephan W. Hamilton, Director, Municipal & Property Division
County Tax Rate
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16. Local Education Tax Rate per $1,000/value
Stephan W. Hamilton, Director, Municipal & Property Division
Local Education Tax Rate per $1,000/value
Net School Appropriations
less State Grants and Statewide Education Tax
divided by
Locally Assessed Property Valuation
(per line 21 of MS-1) x 1,000
= Local Education Tax Rate per 1,000
AND/OR
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17. Locally Apportioned Education Tax Rate per $1,000/value
Stephan W. Hamilton, Director, Municipal & Property Division
Locally Apportioned Education Tax Rate per $1,000/value
Regional School Apportionment
less State Grants and Statewide Education Tax
divided by
Locally Assessed Property Valuation
(per line 21 of MS-1) x 1,000
= Local Education Tax Rate per 1,000
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18. Local Education Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
Local Education Tax Rate
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19. Statewide Education Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
Statewide Education Tax Rate
Statewide Education Amount
rate producing $363 million = $2.420
$2.420 x Town’s previous year Equalized Value w/out Utilities (Prior Year)
Divided by
Locally Assessed Property Valuation
Without utilities (Current Year)
(Per line 23 of MS-1) x 1,000
= Statewide Education Tax Rate per 1,000
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20. Statewide Education Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
Statewide Education Tax Rate
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21. Statewide Education Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
Statewide Education Tax Rate
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22. Statewide Education Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
Statewide Education Tax Rate
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23. Statewide Education Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
Statewide Education Tax Rate
Important facts to remember about Statewide Education Tax:
The money is raised locally
The money is retained locally to offset education costs
It becomes revenue to local education effort
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24. Stephan W. Hamilton, Director, Municipal & Property Division
Changing Tax Rates
There are many factors that contribute to the calculation of local tax rates.
Many factors change from year to year and may have an impact on rates.
One factor causing an impact is the locally assessed valuation of property.
Let’s review a couple of ways to consider the impact of locally assessed value on tax rates.
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25. 3 Year Statewide Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
3 Year Statewide Tax Rate
2015
Municipal $
County $
Local Education
$ 20.54
State Education $
Total
$ 32.36
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26. 3 Year Statewide Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
3 Year Statewide Tax Rate
2015
2014
Municipal $ $
County $ $
Local Education
$ 20.54
$ 17.46
State Education $ $
Total
$ 32.36
$ 26.48
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27. 3 Year Statewide Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
3 Year Statewide Tax Rate
2015
2014
2013
Municipal $ $ $
County $ $ $
Local Education
$ 20.54
$ 17.46
$ 17.63
State Education $ $ $
Total
$ 32.36
$ 26.48
$ 25.70
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28. 3 Year Statewide Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
3 Year Statewide Tax Rate
2015
2014
2013
Municipal $ $ $
County $ $ $
Local Education
$ 20.54
$ 17.46
$ 17.63
State Education $ $ $
Total
$ 32.36
$ 26.48
$ 25.70
Full Value Rate -
$ 28.41
$ 27.92
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29. Stephan W. Hamilton, Director, Municipal & Property Division
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30. Stephan W. Hamilton, Director, Municipal & Property Division
Changing Tax Rates
Changes in cooperative school apportionment and net appropriation may drive tax rate changes.
Some apportionment formulae rely on valuation (in part or in whole), while others are more sensitive to student population.
Education expenses typically make up most of local property taxes.
In Orford, over the last three years 75% of the local tax rate is for education.
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31. Orford Share of Rivendell Apportionment
Stephan W. Hamilton, Director, Municipal & Property Division
Orford Share of Rivendell Apportionment
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32. Orford Total Education Tax Effort
Stephan W. Hamilton, Director, Municipal & Property Division
Orford Total Education Tax Effort
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33. Stephan W. Hamilton, Director, Municipal & Property Division
Changing Tax Rates
Reductions in revenue also impact tax effort and resulting tax rates.
Use of Unassigned Fund Balance (UFB) to reduce the tax rate is revenue.
Recent changes in the amount of UFB used in the tax rate calculation has an impact on rate calculation.
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34. Orford Unassigned Fund Balance Used in Tax Rate Calculations
Stephan W. Hamilton, Director, Municipal & Property Division
Orford Unassigned Fund Balance Used in Tax Rate Calculations
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35. Orford Total Municipal Tax Effort
Stephan W. Hamilton, Director, Municipal & Property Division
Orford Total Municipal Tax Effort
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36. Orford Total Municipal Tax Effort Without Use of UFB
Stephan W. Hamilton, Director, Municipal & Property Division
Orford Total Municipal Tax Effort Without Use of UFB
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37. Stephan W. Hamilton, Director, Municipal & Property Division
Changing Tax Rates
Increasing expenditures usually lead to increased net appropriations.
The net tax effort is divided by locally assessed value.
If there is an increase in the amount of money to be raised, tax rates will rise if all other factors remain the same.
In Orford, the amount of money to be raised increased by about 12%.
Total local assessments dropped by 7.5%.
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38. 2014 Statewide Tax Effort, Valuation and Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
2014 Statewide Tax Effort, Valuation and Tax Rate
2014 As Calculated
Tax Effort
Valuation
Tax Rate
Municipal
$ ,250
$ 146,232,874 $
County
$ ,640 $
Local Education
$ 2,553,315
$ 17.46
State Education
$ ,459
$ 143,578,774 $
Total
$ 3,865,664
$ 26.48
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39. 2015 Statewide Tax Effort, Valuation and Tax Rate
Stephan W. Hamilton, Director, Municipal & Property Division
2015 Statewide Tax Effort, Valuation and Tax Rate
2015 As Calculated
Tax Effort
Valuation
Tax Rate
Municipal
$ 1,039,895
$ 135,087,611 $
County
$ ,690 $
Local Education
$ 2,774,901
$ 20.54
State Education
$ ,651
$ 132,897,911 $
Total
$ 4,366,137
$ 32.36
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40. Changes in 2015 Tax Effort 2015 Tax Effort 2014 Tax Effort
Stephan W. Hamilton, Director, Municipal & Property Division
Changes in 2015 Tax Effort
2015 Tax Effort
2014 Tax Effort
Increase (Decrease)
Municipal
$ 1,039,895
$ ,250
$ ,645
County
$ ,690
$ ,640
$ ,050
Local Education
$ 2,774,901
$ 2,553,315
$ ,586
State Education
$ ,651
$ ,459
$ (33,808)
Total
$ 4,366,137
$ 3,865,664
$ ,473
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41. Stephan W. Hamilton, Director, Municipal & Property Division
Questions?
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