2a. 2019 Report
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2a. 2019 Report
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<br /> <br />17 | Page <br /> <br />Exemptions Explained <br /> <br />There are two types of exemptions allowed under North Dakota Statue. They are discretionary and non‐ <br />discretionary. To better understand the dollar effect that exemptions have on a political subdivision, it is best <br />to understand the difference between discretionary and non‐discretionary exemptions. <br /> <br />DISCRETIONARY <br /> <br />Discretionary exemptions are those exemptions that a governmental body can chose to grant or not <br />grant. Jurisdictions throughout Cass County currently have the following discretionary exemptions <br />available to property owners: <br /> <br />1. Residential Exemption for New Construction, which offers up to a $150,000 reduction of the <br />building’s value on newly constructed homes for the first two full years after completion of <br />construction. The builder is also afforded a one‐year exemption for single‐family homes up to <br />$150,000 on five homes only. This exemption is filed for upon purchase of the home for the <br />buyers and by February 1st of each year for the builders. <br />2. Remodeling Exemption for Improvements to Commercial and Residential Buildings offers an <br />exemption on only the new value added by the project. The exemption can be for 3 or 5 years <br />depending on the scope of the project. The property continues to pay property tax on the <br />existing value. The exemption must be filed for prior to February 1st of the year following the <br />completion of the project. It is an exemption that is granted to both residential and commercial <br />projects. <br />3. New and Expanding Industry Exemption and the Payment In Lieu of Tax (PILOT) programs offer <br />businesses that are expanding an opportunity to forgo taxes or make a payment in lieu on the <br />project by meeting specific guidelines set forth by the city. This program is used by businesses <br />that have expanded the size of their facility or have built a larger facility to expand into. The <br />exemption, depending on the scope of the project, can be for 5 to 10 years. The New & <br />Expanding Industry exemption must be applied for prior to start of construction and the PILOT <br />must be applied for prior to occupancy. The eligibility for continuance is review annually by the <br />City Commission. <br />4. Renaissance Zones were created by some jurisdictions to help in the restoration of core areas <br />of their cities. This is the only exemption that collaborates with State of North Dakota allowing <br />for income tax exemptions as well as five years of property tax exemptions. It applies to both <br />residential and commercial property projects and must be applied for and granted by both the <br />city and the state prior to start of construction. <br />5. Tax Increment Financing Districts are set up to help in the development of blighted areas. The <br />existing tax base is frozen, and the tax dollars generated by new growth in the TIF is applied to <br />special assessments. <br /> <br /> <br />
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