The ballot language for Amendment U is almost identical to the ballot language for Amendment R in 2010. That measure, as well as all but one statewide measure that year, was rejected by the voters.
Some individuals and businesses realize a financial benefit from leasing land or equipment from the government. This control over the property is called a possessory interest, as distinguished from an ownership interest. Examples range from Coors Field to some cattle grazing to a coffee shop at DIA.
The value of a possessory interest is typically equal to the cost of the lease for the government property. This amendment would exempt property taxes on possessory interests valued at $6,000 or less with a biennial inflation adjustment rounded up to the nearest 100 dollars.
According to Article X, Section 3 of the constitution, this “taxable property shall be valued for assessment at twenty-nine percent of its actual value.” For comparison, residential real estate in Boulder County is assessed at just under 8%. The mill levy is multiplied by the assessed value to get the actual property tax owed.
These smaller possessory interests currently pay in total about $125,000 annually in property taxes or about $25 on average but account for about 70% of all the possessory interests.
Recommendation: leaning no/against
This year’s recommendation reverses this blog’s recommendation in 2010 on Amendment R.
The primary argument in favor of Amendment U is to save local governments money – namely, the tax collection process can cost more than the revenue collected from the taxes. However, the collection infrastructure is already set up so potential savings would be minimal and hard to track. Meanwhile, the lack of tax revenue is easy to quantify.
Many of the smaller possessory interests are for agricultural leases. The “market rate” for these leases appears to be very low. Perhaps the “market rate” should be revisited.
In 2012 city of Boulder voters approved 2D to allow 40-year leases. At that time and presumably currently, business tenants were charged a market rate and nonprofit tenants a reduced rate (typically $1 per year).
Website for the Yes Side
No known website – Info on a supporting website appreciated.
Website for the No Side
No known website – Info on an opposition website appreciated.
Approved Ballot Language
Amendment U (CONSTITUTIONAL)
Shall there be an amendment to the Colorado constitution concerning an exemption from property taxation for a possessory interest in real property if the actual value of the interest is less than or equal to six thousand dollars or such amount adjusted for inflation?
YES/FOR _______
NO/AGAINST _________
SCR 16-002 to refer Amendment U to the voters
http://www.leg.state.co.us/clics/clics2016a/csl.nsf/fsbillcont3/17448886E26347B387257EF20078FE78?Open&file=SCR002_enr.pdf
Some individuals and businesses realize a financial benefit from leasing land or equipment from the government. This control over the property is called a possessory interest, as distinguished from an ownership interest. Examples range from Coors Field to some cattle grazing to a coffee shop at DIA.
The value of a possessory interest is typically equal to the cost of the lease for the government property. This amendment would exempt property taxes on possessory interests valued at $6,000 or less with a biennial inflation adjustment rounded up to the nearest 100 dollars.
According to Article X, Section 3 of the constitution, this “taxable property shall be valued for assessment at twenty-nine percent of its actual value.” For comparison, residential real estate in Boulder County is assessed at just under 8%. The mill levy is multiplied by the assessed value to get the actual property tax owed.
These smaller possessory interests currently pay in total about $125,000 annually in property taxes or about $25 on average but account for about 70% of all the possessory interests.
Recommendation: leaning no/against
This year’s recommendation reverses this blog’s recommendation in 2010 on Amendment R.
The primary argument in favor of Amendment U is to save local governments money – namely, the tax collection process can cost more than the revenue collected from the taxes. However, the collection infrastructure is already set up so potential savings would be minimal and hard to track. Meanwhile, the lack of tax revenue is easy to quantify.
Many of the smaller possessory interests are for agricultural leases. The “market rate” for these leases appears to be very low. Perhaps the “market rate” should be revisited.
In 2012 city of Boulder voters approved 2D to allow 40-year leases. At that time and presumably currently, business tenants were charged a market rate and nonprofit tenants a reduced rate (typically $1 per year).
Website for the Yes Side
No known website – Info on a supporting website appreciated.
Website for the No Side
No known website – Info on an opposition website appreciated.
Approved Ballot Language
Amendment U (CONSTITUTIONAL)
Shall there be an amendment to the Colorado constitution concerning an exemption from property taxation for a possessory interest in real property if the actual value of the interest is less than or equal to six thousand dollars or such amount adjusted for inflation?
YES/FOR _______
NO/AGAINST _________
SCR 16-002 to refer Amendment U to the voters
http://www.leg.state.co.us/clics/clics2016a/csl.nsf/fsbillcont3/17448886E26347B387257EF20078FE78?Open&file=SCR002_enr.pdf
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