A Tour of the Municipal Property Tax Bill

By David R. Connell

It’s part of the annual cycle, as certain as falling leaves, shorter days and the first snowfall: the December property tax bill. It arrives just as people are looking forward to the holidays. Most people groan, set it aside and pay it before the end of the year. But when the New Year arrives, there’s ample time to revisit and scrutinize it, and taxpayers have the opportunity to question local officials during budget and town meeting season. Every property tax bill is required by statute to contain certain information. This information both stimulates and helps answer the questions, “Why are my taxes so high, and what can I do about it?"

Information Required on Property Tax Bills

No precise format for property tax bills is prescribed, but certain information must be included:

•Total taxes assessed for municipal, school district, state education and county purposes. RSA 76:5; 76:11.
•Valuation of the lands and buildings, which may be combined in one figure. RSA 76:11-a; 76:2-a.
•The separate tax rates for municipal, county, local education and state education, as determined by the Department of Revenue Administration (DRA). RSA 76:11-a.
•The date on which taxes are due and the date from which interest will be due. RSA 76:13.
•A statement of the types of tax relief for which the taxpayer may apply, displayed prominently and legibly. The statute provides that the following language is adequate:
•“If you are elderly, disabled, blind, a veteran, or veteran’s spouse, or are unable to pay taxes due to poverty or other good cause, you may be eligible for a tax exemption, credit, abatement, or deferral. For details and application information, contact (insert title of local assessing officials or office to which application should be made)."RSA 76:11-a, II. Some municipalities provide more detailed explanations.
•The tax collector’s office hours. RSA 41:35, I.

Either as part of the tax bill, with the tax bill, or by separate mailing within 90 days of the final tax bill, the tax collector must provide a summary of all uncollected and unredeemed taxes on the property. The governing body may vote to include additional information on the tax bill “as a means of further educating the public relative to the laws regarding property taxes." RSA 76:11-a, III. However, “[u]nder no circumstances shall a city or town mail statements of position on matters of public policy along with the tax bill." RSA 76:11.

By definition, the property tax assessed on any given parcel is determined by multiplying the assessed value of the parcel by the tax rate. These are the first concepts to understand.


The selectmen are the assessors in towns unless the town has voted to create a board of assessors under RSA 41:2-c. With certain exceptions listed in the statute (land in current use being the most common), the selectmen must appraise all taxable property at market value. RSA 75:1. Property shall be reappraised for this purpose at least as often as every fifth year. RSA 75:8-a. The date of appraisal is April 1. RSA 76:2. Ideally all assessed values would be maintained at 100 percent of market value, that is, an assessment-to-market-value ratio of 1.00. Over time changes in market conditions inevitably cause the average level of assessment in the municipality to rise above 1.00 (in a weak real estate market, such as we are currently experiencing) or to fall below 1.00 (in a strong market, such as prevailed earlier in the decade). This ratio is not, itself, a problem for local municipal taxation, because proportionality within the municipality is what is important, so that each taxpayer bears their fair share of the property tax burden. (See discussion of abatements, below.)

Mass Appraisal. Modern property tax appraisal requires the assistance of qualified consultants or staff. Appraisals for property taxation under RSA 75 are performed by “mass appraisal": “the process of valuing all property within the boundaries of a municipality as of a given date in a uniform order utilizing standard methodology, employing a common reference for data, and allowing for statistical testing." N.H. Admin. Code, Rev. 603.14. “Mass appraisal builds on the same basic principles as single-property appraisal. Because it involves the appraisal of many properties as of a common date, however, mass appraisal techniques emphasize equations, tables and schedules collectively called models." International Association of Assessing Officers, Property Appraisal and Assessment Administration, p. 310 (1990).

Updates and Adjustments. Taxpayers are accustomed to periodic “full revaluation," the “complete measure, listing and valuation of all taxable and nontaxable properties in a municipality ...." N.H. Admin. Code, Rev. 601.11. Often, however, taxpayers are alarmed by the perceived unfairness of changes in their assessed values when the full community has apparently not been revalued. Nevertheless, in response to ever-changing property values, the selectmen have the authority and obligation to make appropriate annual adjustments in assessed values.

Annually, in order to keep assessments “reasonably proportional within the municipality," selectmen shall consider adjusting assessments for any properties that:

(a) They know or believe have had a material physical change;
(b) Changed in ownership;
(c) Have undergone zoning changes;
(d) Have undergone changes to exemptions, credits or abatements;
(e) Have undergone subdivision, boundary line adjustments or mergers; or
(f) Have undergone other changes affecting value. RSA 75:8, II.

Adjustments in assessments are also permissible on the basis of annual sales data. One of the functions of a mass appraisal system is “annual value updates." “Update" is defined as “adjusting the valuations of all or specified portions of a municipality." N.H. Admin. Code, Rev. 603.01 (k). “Updates are annual adjustments applied to properties between reappraisals. A mass appraisal system can use ratio studies or other market analyses to derive trending factors based on property type, location, size, age, and the like." Property Appraisal and Assessment Administration, at p. 310. A ratio study compares assessed values to market values. (For more on ratio studies, see the discussion on “equalization" below.) Ratio studies are routinely used in many cities and towns for updates without the inspection and measuring involved in a full revaluation.

Tax Rates

The DRA is charged with determining the tax rates annually for all municipalities in accordance with RSA 21-J:34-:37. RSA 41:15. The final step in the process, the meeting with the DRA representative to certify the tax rates, is a familiar annual ritual for selectmen, but an enormous amount of work is required to get there. The DRA gathers many reports and copies of documents from the cities, towns, school districts and counties concerning their budgets and related governmental proceedings for the year. RSA 21-J:34. N.H. Admin. Code, Rev. 510. DRA also requires reports from cities and towns of the value of taxable property. The DRA confirms the validity of the appropriations and accuracy of the reports and computes the tax rates for cities and towns, including rates for the taxes to be collected for the appropriations made by local school districts, counties and cooperative school districts, and for the state education tax.

The municipal tax rate is relatively straightforward. The appropriations voted by the town less revenue from all other sources is the amount of money that must be raised by property taxes. That sum is divided by the total local assessed property value. The tax rate is expressed in terms of dollars of tax per $1,000 of valuation. The local school district tax rate is more complicated because it is based on the amount of money that must be raised by local property taxes over and above the amount credited to the school district by the state education property tax and other revenue sources.

Currently, the DRA is directed to set the state education tax rate at a level sufficient to generate revenue of $363 million statewide from property taxes. RSA 76:3.

The process of setting county, state education and cooperative school district tax rates involves “equalization" of property values among the municipalities.


Property taxes assessed for state education, county and cooperative school district purposes are “inter-jurisdictional"; in these cases, proportionality requires that all municipalities in the taxing district have their property valued at the same assessment-to-market-value ratio. Not all municipalities conduct revaluations in the same year, and real estate prices fluctuate in different ways in different municipalities. Thus, the values must be annually “equalized" to maintain proportionality in assessing “inter-jurisdictional" property taxes.

Determination of the Equalization Ratio and Equalized Valuation. RSA 21-J:3, XIII provides that the Commissioner of Revenue Administration shall, annually by May 1, equalize the valuation of the property as assessed in all the towns, cities and unincorporated places in the state, using the procedures set forth in RSA 21-J:9-a. The DRA is to conduct a sales-assessment ratio study which shall include arm’s length sales or transfers of property that occurred six months prior to and six months following April 1 of the tax year for which the equalization is made. The DRA may use the inventory of property transfers (PA-34 forms) and may consider such other evidence as may be available. (Special procedures are prescribed where less than two percent of the parcels in the municipality have transferred by arm’s length transactions.) The DRA sends a list of the sales to the municipality, which must, within 45 days after receipt, respond with a report that certifies the sales-assessment information necessary for the DRA to conduct the sales-assessment ratio study. The study compiles the individual ratios of assessed value-to-sales price for every transaction and performs statistical analyses to determine the overall assessment-sales ratio, the “equalization ratio," for the municipality. The total assessed value of property in each municipality is divided by the equalization ratio to yield the equalized valuation of that municipality. The process is further spelled out in the administrative rules of the Department, N.H. Admin. Rules, Rev. 602, and in the DRA Equalization Manual.

Use of Equalization Ratio and Equalized Valuation to Set Tax Rates. By May 1, the DRA notifies every municipality of its ratio and its equalized valuation. The ratio is important because it influences the municipality’s share of the state education and county tax burdens. If the municipality disagrees with the final equalized valuation determined by the DRA, the municipality may, within 30 days, appeal the determination to the Board of Tax and Land Appeals, which must rule within 60 days of receipt of the appeal. RSA 71-B:5, II(a).

The final equalized values for the entire state are then used to compute each municipality’s share of the money to be raised for the state education tax, county tax and cooperative school district tax. Each municipality’s gross dollar share is divided by the total assessed value of the municipality to yield the tax rates on the individual taxpayer’s property tax bill.

Note that the sales data is quite old by the time it comes into play. For example, the equalization ratio for the tax rates on the December 2009 property tax bill was determined the previous May, based on market sales that occurred between October 1, 2007 and September 30, 2008.

Any municipality that is dissatisfied with the tax rate decision may appeal within ten days to the commissioner of DRA, whose decision is final. RSA 21-J:35, VI.

The dissatisfied taxpayer may be curious as to the derivation of the four tax rates that collectively create the property tax burden. But the taxpayer is guaranteed to be curious about the statement on the tax bill concerning ways to reduce their tax burden. These fall into two general categories: exemptions and credits; and abatements.

Exemptions and Credits

An exemption reduces the assessed valuation of real property for tax purposes. RSA 72:29, III. There are two categories of exemptions: those related to the use of the land and those related to the circumstances of the landowner. A tax credit is an amount of money deducted from the tax bill. RSA 72:29, IV. The tax deferral is a special type of relief for elderly and disabled taxpayers. RSA 72:38-a. There are many types of exemption and credits, some automatic, some optional for the municipality, all with unique eligibility criteria and procedures to obtain and retain them. The dollar amount, eligibility criteria and procedures are detailed in RSA 72 and the administrative rules of the DRA, Rev. 400. The following list illustrates the variety:

•Religious, educational or charitable use, RSA 72:23
•Veterans tax credit, RSA 72:28
•Surviving spouse of a veteran tax credit, RSA 72:29-a
•Service-connected total disability tax credit, RSA 72:35
•Disabled veterans tax exemption, RSA 72:36-a
•Improvements to assist persons with disabilities exemption, RSA 72:37-a
•Elderly exemptions, RSA 72:39-a and RSA 72:39-b
•Elderly and disabled tax deferral, RSA 72:38-a
•Blind exemption, RSA 72:37
•Disabled exemption, RSA 72:37-b
•Deaf or severely hearing impaired persons exemption, RSA 72:38-b
•Solar energy systems exemption, RSA 72:62
•Wind-powered energy systems exemption, RSA 72:66
•Wood heating energy systems exemption, RSA 72:70


The sole remedy for taxpayers who claim their property taxes should be reduced is a petition for abatement, which must be filed in writing with the selectmen on or before March 1 after the December property tax bill. RSA 76:16. Timely filing is mandatory.

‘Good Cause.’ The selectmen may grant an abatement only for “good cause." In the vast majority of cases, “good cause" means disproportionality. In Porter v. Sanbornton, 150 N.H. 363, 367-68 (2003), the Supreme Court summarized the elements of disproportionality:

New Hampshire tax abatement statutes provide the exclusive remedy to a taxpayer dissatisfied with an assessment.... To succeed on their tax abatement claim, the plaintiffs have the burden of proving by a preponderance of the evidence that they are paying more than their proportional share of taxes.... To carry the burden of proving disproportionality, the taxpayer must establish that the taxpayer’s property is assessed at a higher percentage of fair market value than the percentage at which property is generally assessed in the town.... [citations omitted]

Often a dissatisfied taxpayer will file for an abatement because “my property isn’t worth that much," or “all my neighbors’ assessments are lower than mine." The taxpayer’s market value and assessed value are certainly relevant, but are inconclusive unless it can be shown that the ratio of assessed value to market value is disproportionately high. Likewise, the market values and assessed values of neighbors’ property may have some relevance, but disproportionality is determined by the general ratio of assessed value to market value in town. In other words, disproportionality is determined by comparing the taxpayer’s ratio of assessed value to market value to the equalization ratio as determined by the DRA (see discussion of the equalization ratio above). Note that the taxpayers must file for abatements by March 1, but the relevant equalization ratio is not published until May 1. So even if there is no dispute as to market value, the full picture won’t be seen for 60 days after the filing deadline.

Sometimes a taxpayer will rely on what they see as a flaw in the information on the tax card or even the mass appraisal methodology, if they learn something about that. An abatement may be justified if there is a significant error in the description of the land or buildings on the card or tax map, but the Court has indicated in the Porter v. Sanbornton case that, in the absence of bad faith, the assessment methodology, per se, is not typically relevant in an abatement appeal. “While it is possible that a flawed methodology may lead to a disproportionate tax burden, the flawed methodology does not, in and of itself, prove the disproportionate result." 150 N.H. at 369.

Other Requirements. In addition to the requirement for filing by March 1, there are several other technical requirements for abatements that should be kept in mind:

•If the town still requires an inventory form under RSA 74, compliance with the filing requirement is a prerequisite to the right to seek an abatement. RSA 76:16, I.
•Any taxpayer who refuses an inspection under RSA 74:17 forfeits the right to seek an abatement. In re Walsh, 156 N.H. 347 (2007).
•There is a form for a petition for abatement prepared by the Board of Tax and Land Appeals, but its use is not mandatory. RSA 76:16, III, IV.
•The Supreme Court has held that only a brief explanation of the grounds for abatement is required in the petition for abatement. GGP Steeplegate, Inc. v. Concord, 150 N.H. 683 (2004).
•However, any parcel owned but not identified in the taxpayer’s petition is not eligible for abatement. Appeal of Sunapee, 126 N.H. 214, 216 (1985).
•Moreover, if the assessed value on one parcel owned by the taxpayer is disproportionately high, but the average assessment on all properties owned by the taxpayer is proper (whether or not they are included in the abatement petition), then the taxpayer will not be entitled to an abatement. 126 N.H. at 217.

Appeals. RSA 76:16, II calls for the selectmen to grant or deny abatement applications in writing by July 1, but “[t]he failure to respond shall constitute denial." If the selectmen neglect or refuse to abate, the taxpayer may file an appeal by September 1 with either the Board of Tax and Land Appeals, RSA 76:16-a, or the superior court. RSA 76:17. For all cases in superior court and large or complex cases in the board of tax and land appeals, the selectmen should consult counsel if they have not already done so earlier in the process.

David Connell is legal services counsel with the New Hampshire Local Government Center’s Legal Services and Government Affairs Department. For more information on this and other topics of interest to local officials, LGC’s legal services attorneys can be reached Monday through Friday from 8:30 a.m. to 4:30 p.m. by calling 800.852.3358, ext. 384.