AAC
SEEMS TO ME... TAXES
Arkansas has some of that type history, too. First, in the late 1960s and into the 1970s when the courts ruled that Arkansas assessors were not assessing property in accordance with constitutional law, counties were ordered to properly, and on a continual basis, assess real and personal property according to its market value. State legislation was enacted to reinforce constitutional law and to establish a uniform assess- ment procedure for counties to follow. Since property had, for many years, been assessed be-
low value the reappraisal of property was going to increase property taxes in Arkansas immensely in that first statewide, court-ordered reappraisal. Tat is when Arkansas Constitu- tion, Amendment 59 was passed in the general election of 1980 to repeal in part and add to Arkansas Constitution, Article 16.
Tis amendment provided, among other things, a pro-
cedure for the adjustment of taxes after the reappraisal of property that we refer to as a millage adjustment or rollback. Tis procedure is used for the first year that reappraisal values are applied to the tax books to make sure the newly reassessed property values produce tax revenues no greater than 10 per- cent above the revenues received during the previous year. Te rollback procedure caused major millage reductions af- ter the first court-ordered, state-wide reappraisal. In my home county, the county general millage was rolled back from the maximum 5 mills to 1.6 mills. Te county road millage was reduced from the maximum 3 mills to 1 mill. Secondly, Arkansas experienced a man by the name of
Oscar Stilley, a former Fort Smith attorney, who repeatedly tried to get an initiative on the ballot that would completely abolish property taxes in Arkansas and make it almost impos- sible to increase any tax or fee without a vote of the people. It actually made the ballot for the 1998 General Election. It was a scary time for any involved in government opera- tions. But less than a month before the election, when polls showed the proposition headed for passage, the Arkansas Supreme Court struck the proposition from the ballot. Te court said its supporters had used improper procedures, including forgery, to gather signatures. Stilley said they would be back for the 2000 election. Tat’s when all concerned parties — the state, counties, municipalities, school districts and others — got busy. We knew we had to protect the property tax for local government and school operations. Te state of Arkansas also realized that without property taxes more state revenues would have to be expended for schools and local governments, which meant increasing state taxes. But even those would have to be ap- proved by the electorate under Stilley’s proposal. Te result of our collaboration is Amendment 79, which passed by a 60 percent to 32 percent margin. Tis amend-
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ment limited the increase in the assessed value of a taxpayer’s real property after a countywide reappraisal and provided a property tax credit on homestead property. Te credit is funded with a ½-cent state sales tax.
After the passage and implementation of Amendment 79, the past 20 years have been void of any serious attempt to abolish property taxes in Arkansas. Property tax is a crucial source of revenue for local government entities.
Administration Te property tax system is administered at the county
level. Te federal government no longer levies a property tax. Neither does the state of Arkansas. Tey did in years past, but Amendment 47 was passed in the General Election of 1958 and succinctly says, “No ad-valorem tax shall be levied upon property by the State.” Real and personal property is defined in Title 26 [§ 26- 1-101] as all tangible owned real estate that is fixed and not readily movable. Tis includes land and all structures and improvements made to that land, such as buildings, homes (including mobile homes) and barns. As with real property, personal property is subject to own- ership and is tangible. Previously in Arkansas, we paid per- sonal property taxes on many more personal property items than we do now. Items of household furniture and furnish- ings, clothing, appliances and other personal property used within a home were exempted from personal property tax by Amendment 71, which was adopted in the 1992 General Election. Examples of taxable personal property today in- clude: (1) vehicles; (2) boats; (3) motorcycles; (4) recreational vehicles; (5) livestock; and (6) farm machinery. Each year, in accordance with § 26-26-1408, every Ar- kansas taxpayer must report taxable personal property to the county assessor for assessment of ad valorem taxes between Jan. 1 and May 31. While some personal property, such as vehicles, can be tracked because they must be registered, other personal property is difficult to track. Te assessor in many cases must depend on the honesty of the taxpayer. Tat’s right, to some degree, the personal property tax system in Arkansas works on the “honor system”. Te assessed value of real property is calculated as 20
percent of the true market value in most cases. Te exception is that agricultural land is assessed based on use value rather than market value. Real property in Arkansas goes through regular reap- praisal. Each county must reappraise all real property every three or five years, depending on growth between appraisals [Arkansas Code Annotated § 26-26-1902]. County-wide reappraisals of real property will be completed no later than July 1 of the year in which the county-wide reappraisal is
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