The tax basis (the base upon which the tax rate is applied) is the property's assessed value in the base year or acquisition value scaled by a growth factor. (The "base year" is yet to be determined. The tax basis may be based on a single year FMV, an average of two or more years' FMV, or the acquisition value.)
• Value at the time the property was acquired is the property's purchase price if the sale is an arm's length transaction. If the property was not acquired in an arm's length transaction, the value is determined by the county tax assessor as what it would have been under a fair market sale. (The buyer would be required to disclose the acquisition price to the county assessor.)
• The tax basis would annually increase by a certain known percentage. This growth factor would be based on the long-term historical appreciation of housing prices or another index that would reflect an increase in income levels to our citizens.
• Tax rates are set by each taxing entity. Tax rates will be adjusted according to truth in taxation. (Total current value x current rate = Total base value x growth factor x adjusted rate.)
• No change is made to truth in taxation. Full disclosure and public hearings regarding certain property tax revenue increases would still be required.
• Certain tax increases could continue to require a majority vote by the voters within the taxing entity.
• A portion of the existing revenue generated by property tax would be shifted to a consumption tax.
