property tax

Examples of property tax in the following topics:

• Financing State and Local Government

  • Taxes are the primary source of revenue for state and local governments; income, property, and sales taxes are common examples of state and local taxes.
  • Sales tax is collected by the seller at the time of sale, or remitted as use tax by buyers of taxable items who did not pay sales tax.
  • Property taxes are imposed by most local governments and many special purpose authorities based on the fair market value of property.
  • Property tax is generally imposed only on real estate, though some jurisdictions tax some forms of business property.
  • Property tax rules and rates vary widely.

• Individual Taxes

  • These taxes may be imposed on the same income, property, or activity, often without offset of one tax against another.
  • In U.S. constitutional law, direct taxes refer to poll taxes and property taxes, which are based on simple existence or ownership.
  • Property tax is based on fair market value the subject property.
  • The estate tax is an excise tax levied on the right to pass property at death.
  • Gift taxes are levied on the giver (donor) of property where the property is transferred for less than adequate consideration.

• The Federal Tax System

  • These include taxes on income, payroll, property, sales, imports, estates and gifts, as well as various fees.
  • Property taxes are imposed by most local governments and many special purpose authorities based on the fair market value of property.
  • Property tax is generally imposed only on realty, though some jurisdictions tax some forms of business property.
  • Property tax rules and rates vary widely.
  • Similar to federal income taxes, federal estate and gift taxes are imposed on worldwide property of citizens and residents and allow a credit for foreign taxes.

• Corporate and Payroll Taxes

  • Many countries impose a corporate tax, also called corporation tax or company tax, on the income or capital of some types of legal entities.
  • The taxes may also be referred to as income tax or capital tax.
  • The effective tax rate is the average corporate tax rate on the company's income and this takes into consideration tax benefits included in a current tax year.
  • Corporations are also subject to a variety of other taxes including: property tax, payroll tax, excise tax, customs tax and value-added tax along with other common taxes, generally in the same manner as other taxpayers.
  • Deductions from an employee's wages are taxes that employers are required to withhold from employees' wages, also known as withholding tax, pay-as-you-earn tax (PAYE), or pay-as-you-go tax (PAYG).

• Corporate Taxes

  • Corporations may be taxed on their incomes, property, or their very existence.
  • In addition, the individual is held liable for the actions of the business, meaning claimants can pursue the personal property of the individual should solvency issues arise.
  • This income is taxed at a specified corporate tax rate.
  • Some systems have graduated tax rates - corporations with lower levels of income pay a lower rate of tax - or impose tax at different rates for different types of corporations.
  • Corporations are also subject to property tax, payroll tax, withholding tax, excise tax, customs duties and value added tax.

• How Taxes Work in the United States

  • Each has its own authority to tax.
  • Similarly, local governments can impose a variety of taxes, such as property taxes.
  • Federal taxes are created by the US Congress, which passes laws mandating what is taxed and the amount of the tax.
  • One of the most well-known taxes, the federal income tax, wasn't created until the passage of the 16th amendment in 1913 explicitly gave the US Congress the authority to tax income.
  • Disputes over tax rules are generally heard in the United States Tax Court before the tax is paid, or in a United States District Court or United States Court of Federal Claims after the tax is paid.

• Federal Income Tax Rates

  • When the tax is levied on the income of companies, it is often called a corporate tax, corporate income tax or profit tax.
  • Individual income taxes often tax the total income of the individual, while corporate income taxes often tax net income.
  • Farmers' Loan & Trust Co., ruled that a tax based on receipts from the use of property was unconstitutional.
  • The Court held that taxes on rents from real estate, interest income from personal property, and other income from personal property were treated as direct taxes on property, and had to be apportioned.
  • Since apportionment of income taxes was impractical, this decision effectively prohibited a federal tax on income from property.

• Fiscal Policy -- Budget and Taxes

  • (Local governments, in contrast, generally collect most of their tax revenues from property taxes.
  • State governments traditionally have depended on sales and excise taxes, but state income taxes have grown more important since World War II. )
  • The 1862 tax law also established the Office of the Commissioner of Internal Revenue to collect taxes and enforce tax laws either by seizing the property and income of non-payers or through prosecution.
  • The Tax Reform Act of 1986, perhaps the most substantial reform of the U.S. tax system since the beginning of the income tax, reduced income tax rates while cutting back many popular income tax deductions (the home mortgage deduction and IRA deductions were preserved, however).
  • The Tax Reform Act replaced the previous law's 15 tax brackets, which had a top tax rate of 50 percent, with a system that had only two tax brackets -- 15 percent and 28 percent.

• Tax Loopholes and Lowered Taxes

  • Tax evasion is the term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means.
  • Tax avoidance is the legal utilization of the tax regime to one's own advantage, to reduce the amount of tax that is payable by means that are within the law.
  • The term tax mitigation's original use was by tax advisors as an alternative to the pejorative term tax avoidance.
  • Both tax avoidance and evasion can be viewed as forms of tax noncompliance, as they describe a range of activities that are unfavorable to a state's tax system.
  • These include taxes on income, payroll, property, sales, imports, estates, and gifts, as well as various fees.

• Disposable Income

  • Income left after paying taxes is referred to as disposable income.
  • Disposable income is thus total personal income minus personal current taxes .
  • Amounts required to be deducted by law include federal, state, and local taxes, state unemployment and disability taxes, social security taxes, and other garnishments or levies, but does not include such deductions as voluntary retirement contributions and transportation deductions.
  • It is total personal income after subtracting taxes and typical expenses (such as rent or mortgage, utilities, insurance, medical fees, transportation, property maintenance, child support, food and sundries, etc.) needed to maintain a certain standard of living.
  • It is whatever income is left after taxes.