CAE Tax Policy and Assessment Administration Flashcards
6 cards from real CAE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CAE Tax Policy and Assessment Administration flashcards as text
What is the primary difference between a tax levy and a tax rate?
Answer: A levy is the total amount of tax to be collected; a rate is applied per unit of value
The tax levy is the total dollar amount a taxing jurisdiction needs to collect, while the tax rate is derived by dividing the levy by the total taxable assessed value.
Which concept describes the shifting of the property tax burden from owners to tenants through higher rents?
Answer: Tax shifting
Tax shifting occurs when property owners pass along property tax increases to tenants through higher rental rates, changing who ultimately bears the tax burden.
What is the role of the equalization factor (multiplier) in property tax administration?
Answer: It adjusts assessed values to achieve a uniform assessment level statewide
An equalization factor (state multiplier) is applied to local assessed values to bring them to a uniform percentage of market value for purposes of state aid and levy distribution.
Which of the following best describes 'tax capitalization' in property assessment?
Answer: The reduction in market value caused by high property taxes relative to comparable properties
Tax capitalization refers to the phenomenon where higher-than-normal property taxes reduce a property's market value, as buyers discount the price to offset future tax obligations.
What is the typical consequence of a jurisdiction having a Price-Related Differential (PRD) greater than 1.03?
Answer: Lower-value properties are over-assessed relative to higher-value properties
A PRD above 1.03 indicates regressivity, meaning lower-value properties are assessed at a higher percentage of market value than higher-value properties.
Which provision commonly limits the annual increase in a property's assessed value in many U.S. states?
Answer: Assessment cap or limitation
An assessment cap or limitation (such as California's Proposition 13) restricts how much a property's assessed value can increase annually, regardless of market appreciation.