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Rules for Missouri Fourth-Class Cities

IX. Levying Property Taxes

Parenthetical numbers in the text refer to sections of the current Revised Statutes of Missouri, abbreviated as RSMo.

The situation

The city is authorized to levy, upon council passage of an ordinance, a tax of up to $1 for every $100 of assessed valuation (94.250). However, the passage of constitutional tax limitation in 1980 and court-ordered statewide reassessment in 1982-85 make this a more complex undertaking. The constitutional amendment provided that any tax not being levied when the amendment was adopted requires voter approval. The reassessment rollback set a tax-rate ceiling based on pre-reassessment revenues and new assessment valuations. These are explained below.

A maximum of 30 cents per $100 assessed can be levied for up to four years at a time, provided the issue goes to the voters and receives a two-thirds favorable vote. The question is put on the ballot in one of two ways. The council can decide on its own to put the question on the ballot. Or it must put the question on the ballot when presented with petitions signed by voters equal to 5 percent of the total vote cast in the most recent mayor's election. The four-year increase may be renewed if voters approve by a two-to-one majority (94.250).

The property lien

Taxes levied by the city become a lien against all taxable property in the city (94.190 [4]). Property may be sold for unpaid taxes in the same manner as it's for unpaid county taxes. Should the owner wish to redeem after a property has been sold for taxes, he or she has a deadline of two years from the day of sale and must pay all costs, penalties and 10 percent annual interest (140.340).

Procedures necessary

Before a tax can be levied, the council must set the rate in a properly announced public session. The clerk must certify this to the county clerk before September 1st. Timing is crucial in order to get the rate extended on tax bills for the current year (67.110).

The set and voter-approved rate is levied against all taxable property assessed in the county, both real and personal. The clerk extends approved levies against valuations in the abstract and then charges the collector with collecting the full amount. [See V: Clerk, and X: Collector for more detail.]

Adjustments required

Under a constitutional amendment, each year's assessed valuation must be compared with that of the prior year. Excluding new construction and improvements, to the extent valuation exceeds last year's plus the federally calculated cost of living, the rate must be reduced to produce the same revenue as before plus whatever new construction adds.

The county furnishes new construction figures. (Const., art. X, sec. 22.)

A second calculation must also be made. If the assessed valuation increased, a tax-rate ceiling is established by statute (137.073). This is capped at either the most recent voter-approved rate or the rate that was levied in 1984. The intent is to provide no more revenue from the new (increased) assessed property valuation than was produced by the old assessed value plus the revenues from new construction and an inflation factor.

 

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