Tax Classification
In a 1978
referendum, the voters allowed the classification of property according
to use and authorized cities and towns to adopt different tax rates for
different classes of property, within certain parameters. The original
intent was to provide a mechanism to preserve the proportion of property
taxes being paid by the commercial / industrial sectors because initial
100% revaluations were threatening major increases for residential
taxpayers.
Pursuant to this amendment, the Department of
Revenue (DOR) authorized the adoption of 2 tax rates. One for
residential and open space classes (RO) and 1 for commercial,
industrial, and personal property (CIP).
In 1988, rising
residential values were resulting in a significant shift of the tax
burden to homeowners in some communities. Legislation changed the
maximum shift to business property to 75% as long as the residential
burden is at least 50%. It also stipulated that the residential share of
the total levy cannot be lower than its lowest share since the
community's values were first certified at full and fair cash value.