What Is Truth in Taxation
Truth in Taxation is a state-level requirement that taxing authorities must publicly disclose and justify any increase in the effective tax rate, even if total assessed values rise. Most states require public notice and a public hearing before the local government can adopt a budget that generates more tax revenue than the previous year, adjusted for new construction and changes in the tax base.
The mechanism works like this: if assessed values in your county increase by 5% due to market appreciation, but the tax levy remains flat, no additional hearing is required. However, if the taxing authority wants to collect more total dollars by raising the tax rate itself, that triggers Truth in Taxation notification and a hearing opportunity. This protects property owners from silent tax increases buried in rising assessments.
How It Applies to Your Assessment
Truth in Taxation creates a direct link between your property assessment and overall tax revenue. When a county reassesses properties using updated appraisal methods or comparable sales data, those higher assessments don't automatically trigger Truth in Taxation requirements. But when your local government wants to increase the Tax Levy beyond growth in the assessment base, the law requires them to announce it and hold a public hearing first.
This matters during board of review hearings. If you're appealing an assessment that appears inflated based on comparable sales in your area, Truth in Taxation doesn't directly reduce your individual assessment. However, it does mean the taxing authority calculated the Revenue Neutral Rate publicly. You can request that calculation and review whether the assessment ratio applied to your property matches what was used district-wide. Assessment ratios typically range from 25% to 100% of market value, depending on your state. If your property was assessed at 95% of comparable sales value while the district average is 85%, you have grounds for an appeal.
Timeline and Notification Requirements
- Notice must be published in a local newspaper at least 10 days before the public hearing in most states
- The notice must state the proposed tax rate and the Revenue Neutral Rate for comparison
- Public hearings typically occur 2 to 4 weeks before final budget adoption
- Board of review hearings usually take place 30 to 60 days after Truth in Taxation hearings close
Common Questions
- Does Truth in Taxation guarantee my assessment will be lowered? No. Truth in Taxation ensures transparency about tax rate increases, but it doesn't directly impact individual assessments. Use the publicly disclosed appraisal methods and comparable sales data presented during Truth in Taxation proceedings to build your board of review appeal argument.
- Can I challenge my assessment before the Truth in Taxation hearing? Yes, these are separate processes. Your board of review hearing happens independently and focuses on whether your property was assessed correctly using comparable sales and proper appraisal methods. Truth in Taxation hearings address overall revenue collection, not individual property values.
- What if the taxing authority didn't hold a Truth in Taxation hearing? If a tax rate increase occurred without proper notice and hearing, you may have grounds to challenge the legality of the entire tax levy in court, though this is a separate action from appealing your individual assessment.