Tax Guide Article

By Marj Roy, Town Administrator

This guide is a basic overview of the Town’s tax rate and intended to help explain the components of the tax rate and how it is set each year.

The tax rate, or how much we pay for every $1,000 of property valuation is determined by the NH Department of Revenue Administration and considers three main components:

Total appropriation (voted budget)

This is the total budget that once approved at town meeting becomes the appropriation. For 2019 this was $1,845,736.

Total expected revenues

We receive revenue from many different sources: from the town portion of your motor vehicle registration to the town’s portion of the State’s Rooms & Meals tax. For 2019 total revenues were estimated to be $866,464.

 Adjustments (Credits & Overlay)

There are two main adjustments added to our appropriation when setting the tax rate. The first are Veterans Credits which are based on eligibility. For 2019, the amount of Veterans credits equal $59,000. The second adjustment is called the Overlay, which is an allowance abatement of taxes. For 2019, this was set at $22,000. 

Money Raised from Taxation

The first step in calculating the tax rate is to determine how much money the town will need to raise in taxes. This is done by taking the total appropriations voted at Town meeting (budget and warrant articles), subtract total expected revenues and use of fund balance ($247,247), add war service (Veterans) credits, and finally add overlay to arrive at the total amount of money to be raised in taxes. See figure below:

Total Town Needs: $2,443,547

Credits & Overlay: 81,000

Amount of money needed to run the Town: $2,521,801

How We Pay for It: $2,521,801

Amount of money Raised from Taxation 1,388,090

Revenue & Use of Fund Balance 1,133,711

Once we know the amount of money to be raised through taxation, which for 2019 is $1,388,090 the next step is to determine the tax rate per thousand dollars of Town valuation.

Tax Rate Calculation

Simply put the tax rate is the following formula: Amount to be raised / town valuation X 1,000

For 2019, this formula is presented with the actual amounts (with rate rounded up) based upon the following:

1,388,090 / 302,729,290 X 1,000 = 4.59

Total Appropriation $2,443,547

Total Revenue 886,464

Use of Fund Balance 247,247

+ War Service Credits 59,000

+ Overlay  19,254

Amount to be raised in taxes $ 1,388,090.

The town portion of the 2019 tax rate is $4.59 per $1,000 of assessed value. 

What Can Change the Tax Rate?

The State requires that every municipality be assessed at its “full and true” market value. The New Hampshire Constitution (Part 2 Article 6) requires that each municipality “takes value anew” every five years. A revaluation is the most equitable way to accomplish this. If the total Town property valuation goes up, the tax rate will go down. If the total Town valuation goes down, the tax rate will go up.

For 2019, the total tax burden is up 10.3%, the Town revaluation is up by 17.3% over 2018 and the total tax rate for 2019 is down 5.8% from the 2018 tax rate. These factors are all part of the reason you may see a change in your tax bill.

The 2019 Tax Rate

For 2019 the total tax rate is $22.10 per $1,000 of valuation, a decrease of 5% from 2018. The Local Town tax rate decreased by 25 cents or 5%. The combined local and state school decreased 78 cents or 5.1%, the fire district decreased 7 cents or 13% and the county decreased 27 cents or 9%. For a total decrease of $1.37 decrease from the 2018 tax rate.

To determine your full year 2019 tax, multiply the tax rate ($22.10) times the assessed value of your property in thousands: If your property is valued at $150,000, first divide your value by 1,000 to get 150, then multiply it by the tax rate of 22.10 or: 150 x 22.10 = $3,315 for the total year tax due.