Homeowners licking their wounds after paying property taxes last week can compare their bills to the rest of the state and nation -- courtesy of a Pennsylvania college student.
Jonathan Weber was a freshman computer science major at East Stroudsburg University when he filed his first tax return three years ago. He was caught off guard by the different levels of taxation -- and frustrated at the difficulty of comparing to other locations.
He looked up the information and posted it online at www.tax-rates.org. As the site gained page views, he expanded it to cover all 50 states, then added sales, property and business taxes.
Weber, now a senior, says the site now attracts enough advertising to pay for itself and the work he puts into it. He’s continuing to add features to the site based on reader suggestions – he added a tax calculator at the beginning of the year, and plans to add an option to figure how changing different variables would affect your tax bill.
And the site offers data not typically compiled in one place. Visitors can see not only property tax rates, but how much the resulting bill would be when applied to the median property value, and how that amount compares to typical income levels.
Weber calculates the average Hoosier pays a net property tax rate of .85% of assessed value -- 85 cents for every $100. That's almost exactly in the middle of the pack nationally -- but because housing costs are lower in Indiana, the median residential bill of $1,041 is the 11th-lowest in the nation.
An Indiana Department of Local Government Finance spokeswoman says the agency has talked about generating a breakdown of effective tax rates, but can't confirm Weber's numbers. Weber says CPA's and tax lawyers double-check his figures -- he's also heard from people who tell him the tax calculator he added to the site predicted their income tax bill nearly to the dollar.
Marion County’s typical bill, according to Weber, is $1,408, the ninth-highest in the state. Hamilton County tops the charts at $2,274, with Hendricks, Boone, Johnson and Hancock Counties all in the top seven.
But Hamilton County tax bills’ average rate of 1.08% ranks just fifth. Lake County, with a typical bill of $1,852, works out to 1.37%, a full 22 cents per $100 ahead of second-place Marion County.
Lake is the only county in Indiana without a local income tax. Several counties have used the income tax to control property tax rates. And rural counties with less commercial property and lower property values are all but guaranteed to have lower effective tax rates. The state’s property tax caps for residential property are set lower than the caps for farmland or business property. And the state’s homestead and mortgage credits are flat dollar amounts, deducted from assessed value before the tax is calculated, which pulls the median tax percentage downward.
Orange County’s typical tax bill of $515 is the state’s lowest, and the fourth-lowest as a percentage of value. Ohio County property owners pay an average of .45%, the state’s lowest according to the site, for a typical bill of $604.
Tax-rates.org shows eight counties – Lake, Marion, St. Joseph, Hendricks, Hamilton, Johnson, Delaware and Boone – with an average tax rate above 1%, despite the constitutional amendment capping residential taxes at 1% of value. Higher proportions of commercial property drive up the average, and tax hikes approved by referendum for school budgets or construction projects are exempt from the caps.
Most of those counties also have the state’s highest bills. But Delaware County has the state’s seventh-highest effective tax rate despite ranking just 30th in the size of its bills, while Hancock and Dearborn Counties, despite median tax bills above $1,400, are 21st and 31st on Weber’s tax rate list at .92% and .88%.
Both Weber and the DLGF point out that tax rates vary widely even within a county because of multiple taxing districts – not everyone pays a city tax in addition to county tax, and people in the same county may live in different school districts with different tax rates. Weber says he’s working on refining his figures with more specifics on how property taxes are calculated.