The Santa Clara County Board of Supervisors unanimously approved County Assessor Larry Stone’s recommendation to dramatically increase the number of property owners eligible to receive a “too low to assess” exclusion, benefitting mostly small business owners. (See today’s Board Agenda, Item: 125 http://sccgov.iqm2.com/Citizens/Detail_Meeting.aspx?ID=7206)
The new ordinance not only doubles the amount of the exclusion (from $5,000 to $10,000) for business personal property, it also adds two new categories of property eligible for the exemption.
“This low value ordinance is a ‘win-win’ for both the County and some taxpayers. For every $10,000 of assessed value, the county sends a tax bill of $100. The ordinance will eliminate property tax bills of $100 or less,” Stone said. In a formal cost study, Stone’s office demonstrated that the costs to the Assessor, Tax Collector and Controller to assess and collect diminumus assessments, exceeds the revenue generated.
“When I was first elected, I promised that the Assessor would not spend a dollar to collect a dime. I guess I need to update that; the Assessor’s office will not spend $100 to collect $100 dollars or less!” The new ordinance is effective January 1, 2017, The expansion of this ordinance to $10,000 for taxable personal property will primarily benefit business owners of property like business equipment, computers, fixtures and small boats. The Assessor’s Office estimated that 7,600 owners have total business property valued between $5,000 and $10,000, which would now be excluded from taxation. There are approximately 70,000 business property accounts filed in Santa Clara County each year.
“This is a perfect example of how we continue to do things differently,” said Stone. As Assessor I have implemented a sophisticated, at least by government standards, cost accounting system which has enabled the assessor’s office to utilize data to continuously review opportunities for making the department more efficient and smarter. Stone’s recommendation to the Board of Supervisors estimated that the cost to assess and collect these low value properties was approximately $1,895,000, which is far in excess of the projected property tax revenue of $602,000. Moreover it enables the assessor’s office to reallocate approximately 11,000 hours of staff time toward more significant assessments such as commercial and industrial assessment appeals, changes of ownership, and new construction activities.
While business property owners must continue to file a Business Property Statement (Form 571) each year detailing the cost of all supplies, equipment, improvements and land owned at each location within Santa Clara County, they will not have to pay the tax if the assessed value of their property is less than $10,000. “The real benefit is customer service and maintaining public confidence that government can run efficiently,” said Stone. Assessor’s