Get Ready Now for Semi-Annual Tax Billing Next Year!

One bill in 2014, but two (smaller) bills in 2015

May 20, 2014 • Saved under News
By Marj Roy, Town Administrator

The Board of Selectmen heard the concerns of Andover’s taxpayers about switching to semi-annual tax bills in 2014 and has deferred the change until 2015. The goal is to give taxpayers time to prepare for two tax payments in 2015, each one about half of the annual tax payment they’ll make in December of 2014.

Here’s how the transition from annual to semi-annual will work:

Let’s say you own an Andover property valued at $200,000, and that when the 2014 tax rate gets set in October 2014, it turns out to be about 3% higher than 2013’s tax rate of $19.38 per $1,000 of assessed value.

If that’s the case, then in December of 2014 you’ll receive an annual tax bill of $3,992. (That’s $19.96 times 200.) You pay the bill, and your 2014 tax obligation is met.

The Short Story

To prepare for semi-annual tax billing, which begins in Andover in 2015:

  • Plan for a “regular” tax bill in December 2014

  • Plan for a tax bill of about half that much in June 2015

  • Plan for a tax bill probably a little higher than the June bill in December 2015

Then, six months later, in June of 2015, you’ll receive the first of two tax bills for 2015. It can’t be based on the 2015 tax rate, because the 2015 tax rate can’t be set until sometime in October of 2015, after the state Department of Revenue Administration (DRA) can reasonably estimate the total revenue from fees, licenses, etc. that the Town will collect for the year.

So the first of the two tax bills each year will be based on half of your tax obligation for the previous year. In our example, that would be $1,996 (half of $3,992). You pay the June 2015 tax bill, but of course you’re not done at that point.

In October 2015, DRA will set Andover’s tax rate for 2015. Let’s say it’s up about 3% again, at $20.50 per $1,000. Now you know your total tax obligation for 2015: it’s $4,100 ($20.50 times 200).

But you’ve already paid $1,996 in June 2015, and that payment will be reflected on your second 2015 tax bill. So the December 2015 tax bill will show an amount due of $2,104. (That’s $4,100 minus $1,996.) You pay the December 2015 tax bill, and you’re done for the year.

To continue the scenario:

  • Your June 2016 tax bill would be $2,050 (half of your 2015 total tax obligation of $4,100).

  • The 2016 tax rate would be set in October.

  • Your December 2016 tax bill would be based on the new 2016 tax rate minus the $2,050 you already paid in June 2016.

And so on, down through the years.