We've moved! Come join us at Watchdog Arena, where you'll continue to find the same quality articles that expose waste, fraud and abuse as well as examine policy issues at all levels of government.

Please visit our new home and follow us on social media: Facebook & Twitter

We've moved!

Come join us at Watchdog Arena!

Sign Up for Watchdog Updates!

Commercial property taxes in Wichita among highest in the nation

An ongoing study reveals that generally, property taxes on commercial and industrial property in Wichita are high. In particular, taxes on commercial property in Wichita are among the highest in the nation.

The study is produced by Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence. It’s titled “50 State Property Tax Comparison Study, March 2014” and may be read here. It uses a variety of residential, apartment, commercial, and industrial property scenarios to analyze the nature of property taxation across the country. I’ve gathered data from selected tables for Wichita. A PDF version of the table is available here.

A pdf version of this table is available.

A pdf version of this table is available; click here.

In Kansas, residential property is assessed at 11.5 percent of its appraised value. (Appraised value is the market value as determined by the assessor. Assessed value is multiplied by the mill levy rates of taxing jurisdictions in order to compute tax.) Commercial property is assessed at 25 percent of appraised value, and public utility property at 33 percent.

This means that commercial property pays 25 / 11.5 or 2.18 times the property tax rate as residential property. (The study reports a value of 2.263 for Wichita. The difference is likely due to the inclusion on utility property in their calculation.) The U.S. average is 1.716.

Whether higher assessment ratios on commercial property as compared to residential property is good public policy is a subject for debate. But because Wichita’s ratio is high, it leads to high property taxes on commercial property.

For residential property taxes, Wichita ranks below the national average. For a property valued at $150,000, the effective property tax rate in Wichita is 1.324 percent, while the national average is 1.508 percent. The results for a $300,000 property were similar.

Wichita commercial property tax rates compared to national average

Wichita commercial property tax rates compared to national average

Looking at commercial property, the study uses several scenarios with different total values and different values for fixtures. For example, for a $100,000 valued property with $20,000 fixtures (table 25), the study found that the national average for property tax is $2,591 or 2.159 percent of the property value. For Wichita the corresponding values are $3,588 or 2.990 percent, ranking ninth from the top. Wichita property taxes for this scenario are 38.5 percent higher than the national average.

In other scenarios, as the proportion of property value that is machinery and equipment increases, Wichita taxes are lower, compared to other states and cities. This is because Kansas no longer taxes this type of property.

Featured image from Shutterstock

Bob Weeks

Bob Weeks is a blogger for liberty and economic freedom in Kansas: http://wichitaliberty.org. Find him onTwitter: @bob_weeks

More Posts - Website - Twitter - Facebook - YouTube

Categories: Budget and Finance
Tags: , , , ,

RELATED ARTICLES

  1. WichitaLiberty.TV: The need for reform at Wichita City Hall
  2. GA: Augusta approves $2.8 million for broke Hyde Park project
  3. Balancing the Kansas budget
  4. Kansas ‘Green Book’ released
  5. Wichita Metro Chamber of Commerce: What is the attitude towards taxes?

COMMENTS

comments powered by Disqus
Login