Page 8 of 8

 

 

 


Median Income
Option
Introduction

 

Rationale for
Establishing
the Median
Income Option
  

 

Methodology
and Formula
for Computing
the Median
Income Option

 

Analysis of Widely
Held Assumptions
about Nonresident
Taxpayers

 

Town-by-Town
Spreadsheet


 

Perspectives
Index

About 
Perspectives

Perspectives
on Education 
Issues

When School 
Expenses Rise, 
by Allen Larson

Perspectives 
on Housing 
Issues


 

      

 

ANALYSIS OF WIDELY HELD ASSUMPTIONS
ABOUT NONRESIDENT TAXPAYERS

 

There are two main assumptions made about coastal regions like Cape Cod, which are the biggest reasons why these towns have been shortchanged by the current property valuesbased Chapter 70 formula:

  1. Coastal regions are loaded with nonresident taxpayers.  The assumption is that these towns are laden with vacation homes whose owners pay property taxes to the host community, yet do not overburden local services like police, fire, and schools. This presupposes that these vacation homes are not rented out to families who live in them year-round and use town services, particularly schools.

  2. Only coastal regions have nonresident taxpayers.  The assumption here is that all other communities have few if any nonresident taxpayers. This presupposes that there are few if any “snowbirds” who summer in Massachusetts, winter in Florida or other warmer climes, and take advantage of out-of-state tax and estate laws.

 

These assumptions are strongly held on  Beacon Hill, yet there are no data to back them up.

 

Consider the following:

  • Neither the state Division of Local Services nor individual towns track the number of nonresident taxpayers in the Commonwealth.

  • There are 11 communities in Massachusetts that have adopted the “residential exemption” property tax system, which seeks to shift some of the tax burden to nonresident or commercial taxpayers or renters.  However, even these towns cannot ascertain the number of nonresident taxpayers because some full-time residents earn too much to qualify for the exemption. Further, owners of undeveloped or vacant parcels, which bring money into town coffers with no attendant burden on services, cannot qualify.

  • Chelsea, for example, has about 3,100 taxpayers who have qualified for the exemption out of a total of 5,000 taxpayers. Its assessor’s office spokesperson has stated that there are other factors, such as the exact length of time spent at a residence, that make it difficult to determine whether a taxpayer is a full-time resident or not.

        

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