Property taxes are paid to the Washington County Auditor and redistributed to the city and other government jurisdictions such as school boards and the county. Property tax statements are mailed in March. The taxes are based on the estimated market value for the previous year. The payment of one-half of the tax is due by May 15 and the balance by October 15.
The county assessor sets the market value of your property. Market value is the value, for tax purposes, of a particular parcel of property [land and building(s)]. The total of the individual market values is equal to the total market value of the City.
- County assessors value all property in the City annually. Notices indicating these market values for the coming year are sent out in March. In April, the City's Board of Review hears appeals, if any, from property owners. By July, market values are set. There is a lag time between when the property value is set and when the taxes are paid. For example, the market values that are set in 2021 are the basis for taxes payable in 2022. For more information and a schedule of the Local Board of Appeal and Equalization and Open Book Meetings visit Washington County Assessors.
- Second, the tax capacity for each piece of property in the City is calculated by a formula that varies by property type. The formulas are set by the legislature and are subject to change. Total tax capacity, which becomes the City's tax base, is determined by adding the tax capacities of all individual parcels of property in the entire City.
- For example, the tax capacity on the average $300,000 residential homestead in Cottage Grove (for taxes payable in 2023) is calculated this way: 1% of first $300,000 = $3,000 Tax capacity = $3,000
- Third, the City must determine its total gross tax levy, or the amount of property tax money the City needs to operate and pay its loans (which is the debt service on bonded debt) each year. This amount is determined as part of the annual budgeting process.
- Fourth, the City must calculate its tax capacity rate, which is used to calculate the amount of tax to be paid by all City taxpayers. It is determined by dividing the tax levy by the City's total tax capacity.