PERSPECTIVES ON THE BUSINESS PROPERTY TAX BASE
Gary C. Cornia
This chapter examines the property tax base that comprises business property; it focuses almost exclusively on statutory and administrative measures of the business taxable value rather than economic (market) value. 1 Business property is defined as non-residential, income-producing property--that is, commercial, industrial, farm, mineral, railroad and public utility, and business personal property classes.
Although it has been said that the property tax is characterized by few "momentous" changes ( Bowman 1987b: 85), change occurs and a few obvious changes are discussed. Much of the chapter, however, describes general trends or establishes baseline reference points for future studies. A basic concern of the chapter is the treatment of business property relative to other classes of the property tax base. Often, data limitations make it necessary to compare the broad class of business property with residential (non-business) property.
Property tax information is available from a number of published sources, 2 but it seemed that the chapter would be more useful if data reflected de facto practices rather than de jure prescriptions. Consequently, questionnaires were mailed to three groups with an interest in the taxation of business property. Surveys were sent to corporate property tax managers, state revenue departments, and local tax assessors. Three surveys were sent because the roles played by the three groups in the property tax process are very distinct. The design of the questionnaires benefited from a series of previous surveys that were developed and used by the International Association of Assessing Officers (IAAO). The corporate property tax managers who received the surveys were randomly selected by the Institute of Property Taxation in Washington, D.C., 3 and the names for the local assessors were randomly selected from a mailing list provided by the IAAO in Chicago. Questionnaires for state tax administrators were sent to all fifty states and the District of Columbia. Usable responses to the surveys came from 34 percent of the corporate tax managers and 42 percent of the local assessors. (To increase the return rate from local assessors, a