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State Lets Town Split the Difference

December 15, 2018

CHELMSFORD -- The state Department of Revenue on Wednesday approved the town’s new split tax rates.

For fiscal 2019, Chelmsford’s tax rates are as follows:

n Residential: $16.35 per $1,000 valuation.

n Commercial/industrial: $22.21 per $1,000 valuation.

n Personal property: $22.06 per $1,000 valuation.

Chief Assessor Frank Reen said there are three different rates due to both the split -- which shifted 27 percent of the levy burden to commercial, industrial and personal property -- and the small commercial exemption the Board of Selectmen instituted. That exemption gives eligible commercial parcels a 10 percent break on taxes.

To be eligible for the small commercial exemption, the commercial parcel must be valued at $1 million or less and all businesses therein must have 10 or fewer employees at all locations.

“We identified 169 commercial parcels with a (total) value of $57.8 million as eligible for the exemption,” Reen said. “Ten percent of that is $5.78 million, which is deducted from the commercial/industrial valuation when calculating the rate. Residential and personal property rates are culled out and calculated separately.”

Taxes for exemption-eligible properties are calculated by reducing the value by 10 percent and applying the commercial-industrial rate to the new value, he said.

Through the method the overall commercial/industrial rate is established, the burden removed from the exemption-eligible properties is distributed to the rest of the property class, Reen said.

In fiscal 2019, an eligible commercial property valued at $902,000, for instance, would have a $18,030 tax bill, compared to $20,033 for an ineligible property of the same value, he said.

At the Dec. 3 meeting where selectmen set the tax rate, Reen had expressed concern about getting everything approved and calculated in time to send out tax bills in January, especially in light of the small commercial exemption complicating matters.

He credited his staff, in cooperation with that of the Tax Collector’s Office, for working hard to get everything submitted in a timely fashion so that accurate tax bills can be sent out next month.

Follow Alana Melanson at facebook.com/alana.lowellsun or on Twitter @alanamelanson.

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