Q&A: Your Tax Bill Questions Answered

From the township of Montclair today: Below are answers to questions you may have about your third quarter estimated tax bills.

Why is there such a great difference between my 2011 and 2012 tax bills?

The Township of Montclair hired an appraisal company to conduct a township-wide property reassessment in 2011 -- the newly-assessed property values are being used to determine property owners’ 2012 taxes. A reassessment was necessary because of the overall decline in the real estate market since the 2006 township-wide property revaluation that was mandated by the Essex County Board of Taxation and the State of New Jersey. The 2006 revaluation took place at the height of the real estate boom, and many property owners appealed their taxes when market values dropped. The effect of the tax appeals increased the tax burden on those property owners who did not appeal. The reassessment readjusted and fairly apportioned the tax burden among all residents.

As a result of the reassessment, the average property value went down 20.8%. Taxpayers whose property values went down at or close to the 20.8% average would have seen little or no change in their portion of the total tax burden. Those whose property values went down more than 20.8% would have seen their portion of the tax burden decline, while taxpayers whose property values decreased less than the average would have seen their portion of the burden rise.

If you received a significant property tax increase, please keep in mind that this is not a result of local government spending. Below is a comparison of the 2011 and 2012 tax levy based on School, County and Municipal budgets:

2011 Tax Levy = $183,000,000 (approx)
2012 Tax Levy = $187,000,000 (approx)

How was my third quarter estimated tax bill calculated?

Third quarter estimated tax bills were calculated the following way:

1. Take your 2012 assessed value and multiply it by the 2012 estimated tax rate of .03252 (3.252%)
2. Subtract what you paid for the first two quarters of 2012
3. Divide the result by 2 to obtain estimated 2012 third quarter bill amount

Example:

A certain property in Montclair has a 2012 valuation of $527,700 and paid $6,114.70 total for the first and second quarters of 2012.

5271,700 x .03252 = 17,160.80

17,160 – 6,14.70 = $10,246.10

$10,246.10 ÷ 2 = $5,123.05

$5,123.05 is the amount billed for the third quarter estimated tax bill.

Third and fourth quarter tax bills are adjusted to reflect the new assessments for the entire 2012 tax year.

Why is my third quarter bill an “estimated” property tax bill?

The County Board of Taxation has not yet struck the official tax rates for Essex municipalities, however the Township is able to estimate its tax rate based on the total amount of taxes needed to be collected for School, County and Municipal budgets. Once the Board strikes the tax rate for Montclair Township, a reconciled fourth quarter 2012 bill will be issued.

Is there a grace period for paying the third quarter-estimated tax bill?

Yes, there is a 10-day grace period for all property tax bills. August 10, is the last day to pay the third quarter tax bill before interest accrues. Payments received on or after August 11 lose the 10-day grace period and interest charges will apply from the August 1 due date. The interest rate is 8% on the first $1500 and 18% for any amount over $1500.

Can I pay my tax bill online?

Yes, tax and utilities bills may now be paid online using Visa, Mastercard, Discover, American Express credit card. User convenience fees are as follows:

• Visa debit card: $3.95 
• All other debit and credit cards: 2.95%
• Electronic check $1.05 per transaction

Go to online payments portal: http://wipp.edmundsassoc.com/Wipp0713/