Tornado's effects still felt through occupancy law

Tuesday, August 24, 2004

A change made by Cape Girardeau County to help victims of the May 2003 tornado in Jackson is still affecting the way county officials assess property for tax purposes.

As a result of the tornado that decimated Jackson last year, the county opted to adopt an occupancy law, an option available to all counties.

The occupancy law meant that property taxes would not be charged to tornado victims who were ousted from uninhabitable homes. The same rule still applies to new construction, Assessor Jerry Reynolds said.

In the past, the county would assess new construction on a percentage basis. If a building was 50 percent complete on Jan. 1, the property owner would be assessed for 50 percent of what the building would be worth at full value.

Since the 2003 change, no taxes are assessed on any new building not occupied, for up to two years. The assessment is made on a prorated basis, determined by how many months that year people lived in the home.

"Other counties have done it this way for a long time," Reynolds said. "What'll happen is that it will balance itself out. We'll pick up some homes that we wouldn't have got, but we'll lose some partials that we would've had. It might benefit the schools a little bit."

Reynolds said, in the past, the county typically assessed 75 "partials" per year. This year, he said, the county has assessed 50 properties that have been newly occupied, with about 10 more to go on the books. The assessing department will continue to assess newly occupied buildings throughout the rest of the year, until the tax bills are printed.

Many developers may not yet be aware of the 2003 decision.

Jackson developers Jerry Stoverink, Rob Litz and Stan Williams hadn't heard about it. Neither had Cape Girardeau city planner Kent Bratton.

"I do a lot of dealings with these developers and not a one of them has said a peep about it," Bratton said.

Litz said he thinks developers are in favor of the change in property tax assessment.

'Sake of simplicity'"I think you'll find that an overwhelming number of developers will be for it just for the sake of simplicity," said Litz. "With the partial assessment, it's always a guess. Is it 30 percent complete? Forty-two percent? Who knows? Overall, I don't think it's much of an issue."

Mike Peters, a Cape Girardeau developer with California Homes, said, eventually the consumer will pay either way, whether the partial taxes are included in the overall price of the home or whether the consumer pays the prorated taxes based on occupancy.

The cities of Cape Girardeau and Jackson keep track of occupied buildings through permits. The county does not issue occupancy permits so the assessor's department has to keep track of the development in the county. The occupancy law only applies to new construction and homes that are made uninhabitable due to disasters such as fire.

Reynolds said another legal item that's affecting tax collections is better awareness of the state's "value and exchange" status, meaning properties are only assessed for what it would be worth if it were sold, not its value to the owner.

For instance, a factory could pay $1 million for a piece of equipment. The equipment would not be assessed at $1 million; it would be assessed at what the property could sell for.

This is the way Missouri has assessed property for quite some time, Reynolds said.

"It's just now being picked up on by major companies," Reynolds said.


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