Special Assessment Tax

AKA: Betterment.
Context:
- It can be proportional not only to the cost of public improvement but as well to the value of the benefit received from it. For instance, certain public improvements may increase real property value.
- It applies to real estate, not to personal property or assets.
Example(s)
- A Special Assessment District.
- A charge levied against a real property when drinking water lines are installed by a public authority.
- A charge levied against a real property when sewer lines are installed by a public authority.
- …
Counter-Example(s):
See: Real Estate, Personal Property Tax, Public Improvement.

References

(Wikipedia, 2016) ⇒ Retrieved December 11, 2016 from http://en.wikipedia.org/wiki/Special_assessment_tax
- Special assessment is the term used in the United States to designate a unique charge that government units can assess against real estate parcels for certain public projects. This charge is levied in a specific geographic area known as a special assessment district (SAD). A special assessment may only be levied against parcels of real estate which have been identified as having received a direct and unique "benefit" from the public project.^[1] (...) The most universally known special assessments, are charges levied against lands when drinking water lines are installed; when sewer lines are installed; or when streets are paved with concrete or some other impervious surface. However, special assessment tax levies can be made for other purposes including police or fire protection, parking structures, street lighting and many of the other purposes permitted by state and local government statutes.

(MSRB,2016) ⇒ Special Assessment. (n.d.). Retrieved Retrieved December 11, 2016 from Glossary of Municipal Securities Terms (2016) http://www.msrb.org/Glossary/Definition/SPECIAL-ASSESSMENT.aspx
- QUOTE: SPECIAL ASSESSMENT - A charge imposed against a property in a particular locality because that property receives a special benefit by virtue of some public improvement, separate and apart from the general benefit accruing to the public at large. Special assessments may be apportioned according to the value of the benefit received, rather than merely the cost of the improvement.

(Investopedia, 2016) ⇒ Special Assessment Tax. (n.d.) Retrieved December 11, 2016 from http://www.investopedia.com/terms/s/specialassessmenttax.asp
- Special Assessment Tax - The levy assessed against the portion of a property that has been condemned by a public authority. The special assessment tax will reduce the amount of compensation awarded to the property owner because the owner is considered to have also benefited from the improvement. (...) A public authority can only make a partial condemnation it needs to make way for a public improvement. If the amount of the tax exceeds the compensation, then the difference is added to the basis of the property.

(Wikipedia, 2016) ⇒ https://en.wikipedia.org/wiki/betterment Retrieved:2016-10-21.
- Betterment, making better, is a general term used particularly in connection with the increased value given to real property by causes for which a tenant or the public, but not the owner, is responsible; it is thus of the nature of unearned increment. When, for instance, some public improvement results in raising the value of a piece of private land, and the owner is thereby bettered through no merit of his own, he gains by the betterment, and many economists and politicians have sought to arrange, by taxation or otherwise, that the increased value shall come into the pocket of the public rather than into the owner's. A betterment tax would be assessed in order to divert from the owner of the property the profit thus accruing unearned to him. The whole problem is one of the incidence of taxation and the question of land values, and various applications of the principle of betterment have been tried in the United States and in England, raising considerable controversy from time to time.

(Wikipedia, 2016) ⇒ https://en.wikipedia.org/wiki/property_tax Retrieved:2016-10-5.
- (...) A special assessment tax is sometimes confused with property tax. These are two distinct forms of taxation: one (ad valorem tax) relies upon the fair market value of the property being taxed for justification, and the other (special assessment) relies upon a special enhancement called a "benefit" for its justification. The property tax rate is often given as a percentage. It may also be expressed as a per mil (amount of tax per thousand currency units of property value), which is also known as a millage rate or mill (which is also one-thousandth of a currency unit).

(MA DoR, 2008) ⇒ Massachussets DoR. (2008). “Municipal Finance Glossary.” Massachussets Department of Revenue - Division of Local Services
- QUOTE: Betterments (Special Assessments) – Whenever part of a community benefits from a public improvement, or betterment (e.g., water, sewer, sidewalks, etc.), special property taxes may be assessed to the property owners of that area to reimburse the governmental entity for all, or part, of the costs it incurred in completing the project. Each property parcel receiving the benefit is assessed a proportionate share of the cost which may be paid in full, or apportioned over a period of up to 20 years. In this case, one year’s apportionment along with one year’s committed interest computed from October 1 to October 1 is added to the tax bill until the betterment has been paid.

↑ Kadzban v City of Grandville, 502 N.W.2d 299, 501; Davies v City of Lawrence, 218 Kan. 551, 545 P 2d 1115, 1120; State v City of Newark, 27 N.J. Law, 190.