Fighting For The Underdogs In Commercial Property Tax Appeals

Part I: A look at Minnesota’s different property tax classes

On Behalf of | Jul 24, 2020 | Commercial Property Tax Appeals

Any time you dive into documents issued by Minnesota government, you are in danger of drowning in bureaucratic jargon, dense legalese, repetition and redundancy. The state’s websites and publications will never be mistaken for relaxing bedtime reading.

Not so easily understood

This holds true for a three-page document titled “Property Tax 101: Property Tax Variation by Property Type.” The title hints that the contents will be an easily understood explanation of our state’s different property tax rates, but its first sentence will disabuse you of that notion: “The primary cause of variation in property tax burdens is Minnesota’s classified property tax system.”

Not exactly the stuff of best-sellers. Regardless, let’s take a look at the differences in Minnesota’s four property tax classes (taxes payable in 2020): Residential, Agricultural, Commercial/Industrial/Public Utility and Other Residential. Each of those classes is then divided into subsections.

For instance, the Residential class is divided in two: Residential homesteads valued at up to $500,000 (with a tax rate of 1 percent) and residential homesteads valued at over $500,000 (with a tax rate of 1,25 percent).

Commercial property tax rates

The Commercial/Industrial/Public Utility class is divided in three: properties valued at up to $150,000 (taxed at a rate of 1.50 percent) properties valued at over $150,000 (taxed at 2 percent) and electric generation property with attached machinery (also taxed at 2 percent).

On the other hand, the Other Residential class is divided into eight, but because our blog deals with commercial property, we will spare you details of this class.

We will have more on the different property tax classes in an upcoming post to our Minnesota Commercial Property Tax Appeals Blog. Please check back.