BUSINESS PERSONAL PROPERTY

Who is required to file a Business Statement of Assets (form 901)?

All businesses, corporations, partnerships and professionals are required to file a 901 form as of January 1 each year.   

Why do I have to file?
Title 68, section 2817, Oklahoma Statutes, requires that all personal property must be reported each year to the County Assessor’s office. If you receive a return by mail, it is because our office has determined that you may have property to report. If you feel the form is not applicable, return it with an explanation. Either way, the form MUST be returned. Failure to receive a Personal Property Tax Return (Form 901) does not relieve you of your obligation to file.  

What are the due dates for filing the Business Statement of Assets (form 901)?
By Oklahoma statute Title 68, section 2836 (C), the Statement of Assets (Form 901) must be filed from January 1 to March 15 each year. After March 15, the return is delinquent and a penalty of 10% of the assessed valuation is added. After April 15, a penalty of 20% of the assessed valuation is added.

Can our company file for an extension?
No. There is no provision in the statutes for an extension.

How does a taxpayer file a Business Statement of Assets (form 901)? 
The taxpayer completes Form 901 listing the original cost of the assets of the business concern.
Assets include furniture and fixtures, machinery and equipment, computer equipment, leasehold improvements and a schedule of monthly inventories for the past year. The 901 form must be prepared by an owner, partner, officer of the corporation or a bona fide agent. The form must be returned to our office by March 15 to avoid penalty.  Get 901 Instruction sheet.

What if a Business Statement of Assets is not filed?
Title 68, section 2843, If an Oklahoma County business does not file, the County Assessor is required to prepare an assessment from the best information available in the absence of a return by the taxpayer. This is called an arbitrary assessment. An arbitrary assessment must be appealed within ten days of the date of the notice.  Otherwise the assessment becomes final.

How can I obtain this form?
At the beginning of the year, a return is mailed to the taxpayers we have on record. If you did not receive one, contact the Oklahoma County Assessor’s office. Download a copy of Form #901.   

What if I received two 901 forms, or two assessment notices?
Mail the county assessors office a letter stating the correct name, account number and address for each business location. Download an example of an assessment notice.

I have two or more business locations, may I render one 901 form?
No. You must submit a return for each business location.  All business must be assessed on an individual basis so the school districts are funded properly.   

What if I have no assets to report?
If you feel you have nothing to report, attach an explanation about why nothing was reported and file it with the County Assessor’s office. Almost all businesses and rental units have some assets to report even if it is only supplies, or rented equipment. 

What if the business has sold or closed?
Notify the County Assessor in writing with the business name and date of closure. If the business was sold, please provide date of sale and new owners name.    

Is depreciation allowed on furniture and fixtures, machinery and equipment, computer equipment and leasehold improvements?
Yes. In calculating the assessed value, the county assessor's office allows depreciation.  The taxpayer has the option of listing fixed assets in summary or by year of acquisition. Generally, listing by year acquired permits the County Assessor's office to allow more depreciation. Download depreciation multipliers.

Do I have to report assets that I lease, loan, rent, borrow or are provided as part of the rent?
Yes. There is an area on the back of the return specifically for those assets. Even although the assets are assessed to the owner, they must be listed for informational purposes.    

Are licensed vehicles, automobiles, trucks, etc. to be included on this form?
No. This is the most common mistake made in completing the Form 901. Motor vehicles licensed by the state are not included in inventory or as machinery and equipment.

Do I have a chance to correct a mistake or appeal the valuation of my business?
Yes. The Assessor's office will send you a notice of assessment showing the value placed on your business. You have 30 calendar days to review the value and informally appeal the Assessor's office assessment. If the value is still not satisfactory, you may formally appeal the valuation to the County Board of Equalization within 15 calendar days of the date of the informal notice. The Board of Equalization is in session from the fourth Monday in January to May 31.

What if I have old equipment that has been fully depreciated and written off the books?
Whether fully depreciated in your accounting records or not, all property still in use or in your possession should be reported.

What if I buy or sell an existing business during the year? Who is responsible for the taxes?
The owner on January 1 would be responsible for filing the personal property return. However, the County Assessor’s office needs to be notified of any changes in ownership.

If I close my business in the middle of the year, can the taxes be prorated?
No. Oklahoma statutes do not allow for the proration of business personal property taxes.  Taxes are due in full for that tax year.   

What if I have closed my business, but still own the assets?
You are still required to file a return.

Helpful Hints & Suggestions

• File the original return from this office (with name and account number) as soon as possible before March 15. Be sure to sign and date your return.
• Work with your accountant or C.P.A. to identify any equipment that may have been "Physically Removed." List those items in the appropriate space on your return.
• If you have an asset listing or depreciation schedule that identifies each piece of equipment, attach it to the completed return.
• Do not use vague terms such as "various" or "same as last year."
• If you sell your business, go out of business, or move to a new location, please inform this office promptly. This will enable us to keep timely, accurate records.

Contact Us

For information concerning the ad valorem tax exemption process and affidavit forms contact:

Larry Stein, Oklahoma County Assessor
Attn:  Business Personal Department
320 Robert S Kerr Number 313
Oklahoma City, OK 73102
405-713-1222

COMMERCIAL APPRAISAL

Responsibilities

The commercial appraisal department is responsible for placing market value on properties used for business purposes. The department also estimates market value on vacant land that is zoned for commercial usage. Examples of commercial property are retail stores, office buildings, shopping centers, etc. There are commercial properties that have "special uses," such as golf courses, hospitals, and nursing homes. Warehouses and manufacturing facilities are industrial properties.

Property Inspections

The properties are required by Oklahoma law to be inspected on a four year cycle. An inspection calls for all building features, components, and characteristics to be identified, measured and listed. Examples would be the size of the building, occupancy, age, paving, fencing, pools, tennis courts, elevators, canopies, etc.

Computer Assisted Mass Appraisal

All the information is entered on field cards and field units (pen tablet PC's). Computer Assisted Mass Appraisal (CAMA) techniques are used to analyze sales and estimate values for many properties at once.

Estimating Value

Commercial property value is estimated by using all three approaches to value: cost, market analysis, and income. Sometimes one approach is more appropriate to use than the others.

Market Approach

The market approach is the method where sales of similar properties are reviewed and compared to the subject. The sales used are "arms length transactions," where the buyer and seller both acted without undue pressure.

Cost Approach

Another method is to calculate what it would cost, using today's labor and material prices, to replace the structure with a similar one. If the structure is not new, the appraiser determines how much it has depreciated since it was built. The resulting value is then added to the estimated market value of the land. This method is the cost approach.

Income Approach

The third method is the income approach. This method uses analysis of the income stream, operating expenses, and vacancy rates of the market and the subject property to estimate a net operating income. The net income is capitalized with a market rate to estimate value.

Forms

Below are forms that can be downloaded, filled out and sent to the Commercial department. They will analyze the data to determine a value estimate using the income approach. Supporting documentation (such as actual income / expense or profit and loss reports) concerning the subject property should also be submitted.

• Income Verification Apartment Form (PDF)
• Income Verification Hotel Motel Form (PDF)
• Income Verification Industrial Warehouse Form (PDF)
• Income Verification Office Retail Form (PDF)

Submitting Forms

The above forms may be faxed 405-713-1178 or emailed. They may also be mailed:

   Oklahoma County Assessor's Office
   Attn: Commercial Department
   320 Robert S Kerr Number 313
   Oklahoma City, OK 73102

5% Increase Limitation

Due to 1996 legislation, a 5% cap (Taxable Market Value) is placed on property value increases after a revaluation. However, if the title to the property is transferred, changed, or conveyed to another person or entity, the cap limit is removed the following year and the taxable value and market value are set at the same amount. The 5% cap is reapplied the succeeding year.

Improvements

If a property has newly constructed improvements, those items are placed on the tax roll at full market value. Previously existing improvements on the same property are subject to the 5% cap increase limitation unless the title is transferred, etc.

FAQ's

1. How do I figure my tax?

The method for figuring ad valorem taxes requires four steps. For a list of these steps and a tax bill example please visit our Figuring Taxes page.

2. How are tax rates set for my property?

Tax rates or millage levies are set by procedures established in the Oklahoma Constitution or voted directly by the taxpayers. Rates are not set by the County Assessor. There are over 75 different rates in Oklahoma County and those vary across the county depending on which school district, city limit and vocational-technical school district the property is located. The tax or millage rate levied against a property makes a great deal of difference in the taxes paid. Rates in Oklahoma County have varied from $75 to $134 per thousand.

3. What is a mill?

A mill is one-thousandth of a dollar. For convenience in Oklahoma, a tax rate (the sum of all mills levied) is expressed as dollars per thousand dollars of assessed value. A Tax rate of 80 mills, for example, would be 80 tax dollars.

4. Where does my property tax money go?

Property taxes are an important source of revenue for local schools, vocational-technical education, libraries, city and county government. As in most states in the United States, property taxes are the backbone of funding of local government and schools. Oklahoma’s property tax with some changes has fulfilled this basic function since statehood. 

Generally, local schools receive the largest share of the property tax. Schools are followed by city bond issues, county government, vocational-technical schools, libraries, and city-county health department. Except for those provided for in the Oklahoma Constitution, millage levies are controlled by the voters.

As noted in the chart, ad valorem revenues in a typical year are distributed among several groups.

5. When do I pay my tax?

The County Treasurer sends out a tax bill in October each year. Taxes may be paid on two installments. If exactly one half is paid by December 31, then the last half is due by March 31. If nothing is paid by December 31, the full amount is due and becomes delinquent January 1 with applicable penalties owed.

6. How can I save on my property taxes?

Do you qualify for any property tax exemptions such as:

• Homestead Exemption
• Additional Homestead Exemption
• Senior Valuation Freeze
• 100% DAV Exemption
• Tax credit / Refund
• 5 year MFG Exemption

7. What are my rights & responsibilities as a property owner?

Download our "Taxpayer's Rights & Responsibilities" brochure to find out more.... 

8. How can I change my mailing address for my property?

Submit a change of address here.

9. How can I get a copy of my deed?

The County Clerk's office "officially" records all deeds, liens, & mortgages related to properties (Registrar of deeds).  Once a deed is officially recorded, it usually takes 3-4 business days to reflect the change on the Assessor's website.

10. How can I pay my property taxes?

Property tax payments are addressed by the County Treasurer's office (405) 713-1300.  Please contact their office directly concerning all tax payments.

11. I just purchased my property, why have you valued it for more than I paid for it?

There are numerous types of sales occurring throughout the county. Some of which are less than market as well as some more than market. Market value must be viewed as a willing buyer and willing seller without any undue pressure to buy or sell. For example if an individual is transferred from the county or inherits property, they may choose to sell below the market to rid themselves of the burden of trying to maintain two households.

On the other hand one might choose to purchase a home above the indicated market value for reasons such as location to ones employment, relatives, schools and fondness of the overall structure and layout of the property. These, along with other sales that have occurred in the neighborhood, must be considered. We determine what the majority of similar properties are selling for, in that neighborhood, and apply those findings in terms of market value.

12. How can my property be worth more if I haven’t done anything to it?

Property values are based on the activity in the marketplace. If homes, similar to yours, are commanding a higher price one would have to assume yours would be worth similar amount.

13. Why should I be penalized for somebody else paying a high price for a home in my neighborhood?

It isn’t a penalty. Although it does occur, few people will pay more for something than it is worth. Therefore if a number of homes similar to yours are selling for more based on the price paid by newcomers to you neighborhood, it increases the marketability and market value of your property should you decide to sell.

14. I have an older home in an area where they are building new homes. How will this affect my property value?

The newer homes will not have a direct affect on your value. We will, for valuing purposes, compare your home to similar properties in terms of age, condition and size as well as a number of other variables.

15. If you didn’t increase my market value, why did my taxes increase?

The County Assessor does not establish the amount of taxes you pay. If the market value placed on your property by the assessor remained the same as the previous year, the increase in you taxes can probably be attributed to an increase in millage rates within your particular school district. Millage levels are controlled by a vote of the people not the County Assessor. Millage Adjustment Factors (PDF)

16. Do you visit each home in the county?

Yes, Oklahoma law requires us to visit all properties once every four years.

17. What if I think the value placed on my property is wrong?

If you feel the Assessor has made a mistake in valuing your property, you may file an appeal with the Assessor’s office. County Assessor Informal Protest Form #974 (PDF)

18. How can my property increase in value if it is getting older?

In order to establish a market value for your property we must analyze the market in your neighborhood. While the homes similar to yours in terms of characteristics such and condition and age, are selling for more one would have to think your property would command a similar price.

19. Will my value increase every year?

The value of your property is based on the market in your neighborhood. If the values in your area, based on sales, should increase we must increase the entire neighborhood to maintain current market values as required by law. However, if the values were to decrease based on the sales occurring we again must make the necessary adjustments and maintain the current market value by decreasing the values in the neighborhood.

IMPORTANT DATES

For Assessment Purposes

January 1:

• All taxable real and personal property appraised and assessed as of this date.

January 1st - March 15th

• Listing of all taxable real and personal property in the county.
• Accept applications for additional homestead exemptions.
• Accept applications for senior valuation freeze.
• Accept applications for exempt manufacturing.

4th Monday in January:

• Board of Equalization session commences for the purpose of correcting and adjusting the assessment roll to conform to fair cash value and such other responsibilities as prescribed by law.

March 15:

• Deadline for filing Homestead applications
• If any personal property is not listed on or before March 15th , but on or before April 15th, when such property is assessed there shall be added to the assessed valuation of such property a mandatory penalty of 10% of the assessed value.

1st Monday in April:

• A taxpayer may file a complaint if the valuation of property has not increased or decreased from the previous year if the complaint is filed on or before the first Monday in April. Such complaint shall be made upon a form prescribed by the Oklahoma Tax Commission.

April 15:

• If any personal property is not listed on or before April 15th, when such property is assessed there shall be added to the assessed valuation of such property a mandatory penalty of 20% of the assessed value.

May 31:

• Board of Equalization adjourns.

June 15:

• No later than June 15th or 1st working day thereafter, County Assessor prepares an annual abstract (summary) of assessed valuations on all taxable property within the county and transmits said abstract to the Oklahoma Tax Commission.

July 31:

• On or before July 31st, the State Auditor certifies public service valuations to all assessors.

October 1:

• Tax roll delivered to County Treasurer

MANUFACTURED HOMES

For questions, contact MFG Home Department by phone at 405-713-1260 or by EMAIL.

How Is a Manufactured Home assessed?

Manufactured Homes are assessed as either Real or Personal property.

• Real Estate Manufactured Home - Any manufactured home which is located on land owned by the owner of the manufactured homes shall be listed and assessed as real property in the county in which it is located. The owner may also apply for homestead exemption.
• Personal Property Manufactured Home - Any manufactured home located on land not owned by the owner of the manufactured home shall be assessed as personal property in the county in which it is located.

The only difference in valuing real and personal property manufactured homes is the assessment ratio:

• Personal Property Ratio - 13.75 %            
• Real Estate Ratio - 11%

How do we determine the market value of your manufactured home?

In Oklahoma County, market value is based on a market driven cost approach. In determining a final market value, the following adjustments must be considered:

• Quality of Construction
• Square footage
• Types of amenities
• Physical condition at time of inspection

All value adjustments are derived from current market information gathered at the time of the sale from the following sources:

• Sales between dealers and individuals
• Sales between individual owners to individual buyers

All sales information is analyzed and grouped by sales type. Types include owner occupants, purchased for resale (profit), sales adjusted for financing, and trade-ins, etc. Only arms-length transactions are used in the final analysis of the appraisal process.  

How do I register my manufactured home? Procedures vary depending on whether the manufactured home is a new or used.  Contact a tag agent or the OTC at 405-521-3160.

To Move a Manufactured Home / Transfer Title: Senate Bill 1114 effective June 10, 1998, requires proof of paid current calendar year ad valorem tax (OTC form 936). This form can only be found in the County Assessor’s office in the county where the manufactured home is located.

Transactions: The following section is a quick reference guide which will summarize most of the transactions involved in moving or changing title to a manufactured home:

MOVING A NEW or USED MANUFACTURED HOME: 

*Note: There is no action required by the County Assessor. The motor license agent will title and register the manufactured home for the balance of the calendar year.

TRANSFERRING title on a new or used manufactured home (see table below)

REPOSSESSION (see table below)

Can I file for homestead exemption on my manufactured home that resides on land owned by someone else? To find details about filing a home exemption on your manufactured home that resides on another person's land, click the Save on Property Taxes category above.

RESIDENTIAL APPRAISAL

Sales File  |  Market Value Analysis  |  Mass Appraisal Methodology  |  Notice of Valuation  |  Limitations  |  Foreclosures

Overview

The assessment process plays an important role in local government. Equitable assessments assure property owners that they are asked to pay only their fair share of the cost of operating libraries, schools, police protection and other necessary services.

Oklahoma statutes require the County Assessor's office to annually maintain all real estate values and to physically inspect each parcel at least once every four years. Staff appraisers visit the properties and note any changes in the physical attributes. This information is stored by the assessor, updated and maintained for current and future use in the assessment process.

Purpose of Appraisals

The purpose of the appraisals generated by the Oklahoma County Assessor's office is to estimate the market value for ad valorem tax purposes only. The effective date of the appraisals is January 1 of each year.

What if I disagree with the Assessor's Appraisal?

If you feel the Assessor has made a mistake in valuing your property, you may file an appeal with the Assessor’s office. County Assessor Informal Protest Form #974 (PDF).  For other helpful Appraisal questions, refer to the Notice of Valuation and FAQ's.

Sales File

Property Sales

The county has an inventory of sales that have occurred and the latest are stored on the CAMA (Computer Assisted Mass Appraisal) records. This data is collected through numerous sources some of which include deeds, sales letters to buyer and seller and in many cases actual telephone contact. View the O.S. §, Title 68. Revenue and Taxation, Chapter 1 - Tax Codes, Article 28 - Ad Valorem Tax Code, Section 2821, paragraph E for official details. The county assessor shall maintain a comprehensive sales file for each parcel of real property within the county containing relevant property characteristics, sales price information, adjustments to sales price for purposes of cash equivalency, transaction terms and such other information as may be required in order to establish the fair cash value of taxable real property.

Market Values Analysis

Analysis of Market Values

Once market values have been calculated based on information gathered by the property appraisers, the values are analyzed to determine how accurate and equitable they are. The property appraiser does not create market value. The buying and selling of property by the general public establishes the value of property in the real estate marketplace.

A comparison of assessments to sales prices is performed to determine ratios, which are then used to measure the levels and uniformity of assessments. Sales ratio studies by neighborhood, type of property and other characteristics are performed on a regular basis to assure uniformity of values.

Definition of Market Value

"Market Value" is defined as the probable sale price of a property in terms of money in a competitive and open market, assuming that the buyer and seller are acting prudently and knowledgeably, allowing sufficient time for the sale, and assuming that the transaction is not affected by undue pressures.

Both economic and legal definitions of Market Value have been developed and refined.  A current economic definition agreed upon by agencies that regulate federal financial institutions in the United States is: The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.  Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

• The buyer and seller are typically motivated.
• Both parties are well informed or well advised, and acting in what they consider their best interests.
• A reasonable time is allowed for exposure in the open market.
• Payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto.
• The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Appealing the Market Value

You may appeal your valuation within 30 calendar days from the mailing date shown on the notice of valuation (NOV). You may appeal in person at 320 Robert South Kerr, 4th Floor Room 417, Monday through Friday between 8 a.m. and 4:45 p.m. and an informal hearing will be held at that time or you may make a written request for a telephonic informal hearing by sending a letter, fax, or email with supporting documentation challenging the valuation. Requests for telephonic hearings must include owner name, account number(s), legal description(s) and daytime phone number.

• A taxpayer may file a complaint if the valuation of property has not increased or decreased from the previous year if the complaint is filed on or before the first Monday in April. Such complaint shall be made upon a form prescribed by the Oklahoma Tax Commission.
• The Assessor's staff will conduct an informal hearing considering all evidence presented. Final action, concerning the informal appeal, will be taken within 7 calendar days of the informal hearing. Notice of this action will be mailed to taxpayer.
• Within 15 calendar days of the date this notice is mailed or delivered, the taxpayer may file an appeal with the county Board of Equalization (BOE).
• Property owners who appeal are encouraged to perform careful research and submit copies of evidence during each step of the appeal process.

See Notice of Valuation.

Mass Appraisal Methodology

(O.S. §, Title 68. Revenue and Taxation, Chapter 1 - Tax Codes, Article 28 - Article 28 - Advalorem Tax Code, Section 2829)
A. Each county assessor, in order to comply with the provisions of Section 17 of this act requiring the annual valuation of all taxable real and personal property within the county, shall establish the fair cash value of such taxable property using an accepted mass appraisal methodology.

B. For purposes of this section "accepted mass appraisal methodology" shall mean the process for making estimates of fair cash value for a property about which no direct or timely information is available concerning economic value by using known information about the property characteristics, location, use, size, sales price and other information of similar properties. Such mass appraisal methodology may include multiple regression analysis or other statistical techniques for mass appraisal. If information of similar properties is not available in the taxing jurisdiction, the county assessor may use other applicable regional or national information to annually determine the fair cash value of a property estimated at the price it would bring at a fair voluntary sale as provided in Section 17 of this act.

C. Each county assessor shall utilize the information gathered from the visual inspection of real property conducted during each year of the four-year cycle for such inspections and shall conduct such statistical calculations using the data so acquired together with sales price or other information available as may be required to make accurate estimates of fair cash values for all taxable real or personal property within the county each year. The results of such calculations shall be recorded on the assessment roll of the county on an annual basis in order to reflect any increase or decrease in the fair cash value of any property in any year.

D. The statistical analysis required by this section shall be performed within each county using such computer facilities as may be available, but shall be conducted in accordance with procedures established for the uniform mass appraisal program established by the Oklahoma Tax Commission.

Notice of Valuation

Increased Property Value

If the county assessor increases the valuation of any property over the assessment from the preceding year, notification in writing will be sent to the person in whose name any such property is listed. This refers to the assessment notice that is typically mailed during the months of February, March and April to property owners concerning changes in the value of their property. It contains information such as the Current Fair Cash (Market) Value, Taxable Fair Cash Value (3% to 5% limitation), Assessment Percentage, Assessed Value as well as the date it was mailed. If property owners disagree with this change they must request an informal hearing with the Assessor's Office within the specified time frame regarding any change.

Oklahoma Statutes Citationized

Title 68. Revenue and Taxation 

Chapter 1 - Tax Codes
Article 28 - Ad Valorem Tax Code

Cite as: 68 O.S. § 2876 (OSCN 2018)

A. If the county assessor increases the valuation of any personal property above that returned by the taxpayer, or in the case of real property increases the fair cash value or the taxable fair cash value from the preceding year, or pursuant to the requirements of law if the assessor has added property not listed by the taxpayer, the county assessor shall notify the taxpayer in writing of the amount of such valuation as increased or valuation of property so added.

B. For cases in which the taxable fair cash value or fair cash value of real property has increased, the notice shall include the fair cash value of the property for the current year, the taxable fair cash value for the preceding and current year, the assessed value for the preceding and current year and the assessment percentage for the preceding and current year.

C. For cases in which the county assessor increases the valuation of any personal property above that returned by the taxpayer, the notice shall describe the property with sufficient accuracy to notify the taxpayer as to the property included, the fair cash value for the current year, the assessment percentage for the current year, any penalty for the current year pursuant to subsection C of Section 2836 of this title and the assessed value for the current year.

D. The notice shall be mailed to the taxpayer at the taxpayer's last-known address and shall clearly be marked with the mailing date. The assessor shall have the capability to duplicate the notice, showing the date of mailing. Such record shall be prima facie evidence as to the fact of notice having been given as required by this section.

E. The taxpayer shall have thirty (30) days from the date the notice was mailed in which to file a written protest with the county assessor specifying objections to the increase in fair cash value or taxable fair cash value by the county assessor; provided, in the case of a scrivener's error or other admitted error on the part of the county assessor, the assessor may make corrections to a valuation at any time, notwithstanding the thirty-day period specified in this subsection. The protest shall set out the pertinent facts in relation to the matter contained in the notice in ordinary and concise language and in such manner as to enable a person of common understanding to know what is intended. The protest shall be made upon a form prescribed by the Oklahoma Tax Commission.

F. A taxpayer may file a protest if the valuation of property has not increased or decreased from the previous year if the protest is filed on or before the first Monday in April. Such protest shall be made upon a form prescribed by the Oklahoma Tax Commission.

G. The county assessor shall schedule an informal hearing with the taxpayer to hear the protest as to the disputed valuation or addition of omitted property. The informal hearing may be held in person or may be held telephonically, if requested by the taxpayer. A taxpayer that is unable to participate in a scheduled informal hearing, either in person or telephonically, shall be given at least two additional opportunities to participate on one of two alternative dates provided by the county assessor, each on a different day of the week, before the county assessor or an authorized representative of the county assessor. The assessor shall issue a written decision in the matter disputed within 7 calendar days of the date of the informal hearing and shall provide by regular or electronic mail a copy of the decision to the taxpayer. The decision shall clearly be marked with the date it was mailed. Within 15 calendar days of the date the decision is mailed, the taxpayer may file an appeal with the county board of equalization. The appeal shall be made upon a form prescribed by the Oklahoma Tax Commission. One copy of the form shall be mailed or delivered to the county assessor and one copy shall be mailed or delivered to the county board of equalization. On receipt of the notice of an appeal to the county board of equalization by the taxpayer, the county assessor shall provide the county board of equalization with all information submitted by the taxpayer, data supporting the disputed valuation and a written explanation of the results of the informal hearing.

Oklahoma Constitution

SECTION X-8; Valuation of property for taxation - Limit on percentage of fair cash value.

A. Except as otherwise provided in Article X of this Constitution, beginning January 1, 1997, all property which may be taxed ad valorem shall be assessed for taxation as follows:

1. Tangible personal property shall not be assessed for taxation at less than ten percent 10%) nor more than fifteen percent (15%) of its fair cash value, estimated at the price it would bring at a fair voluntary sale;

2. Real property shall not be assessed for ad valorem taxation at a value less than eleven percent (11%) nor greater than thirteen and one-half percent (13.5%) of its fair cash value for the highest and best use for which such property was actually used, or was previously classified for use, during the calendar year next preceding the first day of January on which the assessment is made. The transfer of property without a change in its use classification shall not require a reassessment based exclusively upon the sale value of such property. In connection with the foregoing, the Legislature shall be empowered to enact laws defining classifications of use for the purpose of applying standards to facilitate uniform assessment procedures in this state; and

3. All other property which is assessed by the State Board of Equalization shall be assessed for ad valorem taxation at the percentage of its fair cash value, estimated at the price it would bring at a fair voluntary sale, at which it was assessed on January 1, 1996.

SECTION X-8B; Valuation of real property for ad valorem taxation:

Despite any provision to the contrary, on and after January 1, 2013, the fair cash value of any parcel of locally assessed real property shall not increase by more than five percent (5%) in any taxable year; provided, if such property qualified for a homestead exemption or is classified as agricultural land, any increase to the fair cash value of such locally assessed real property in a taxable year shall be limited to three percent (3%). The provisions of this section shall not apply in any year when title to the property is transferred, changed, or conveyed to another person or when improvements have been made to the property. If title to the property is transferred, changed, or conveyed to another person, the property shall be assessed for that year based on the fair cash value as set forth in Section 8 of Article X of this Constitution. If any improvements are made to the property, the increased value to the property as a result of the improvement shall be assessed for that year based on the fair cash value as set forth in Section 8 of Article X of this Constitution. The provisions of this section shall not apply to any personal property which may be taxed ad valorem or any property which may be valued or assessed by the State Board of Equalization.

O.S. § 2819 Taxable Values of Real and Personal Property

Taxable values of real and personal property shall be established in accordance with the requirements of Sections 8, 8B and 8C of Article X of the Oklahoma Constitution. The county assessor shall determine the taxable value of all taxable property that the assessor is required by law to assess and value and shall determine such taxable value in accordance with the requirements of Sections 8, 8B and 8C of Article X of the Oklahoma Constitution.

Limitations

3% and 5% Limitations

The limitation on assessment increases is not an automatic increase. Oklahoma County residents have saved more than $766 million in lower property taxes since the initial 5% limitation was overwhelmingly passed by voters in 1996. Annual property sales determine if current market prices have increased or decreased. For example if market conditions determine the value has gone down 10% then our records for that property will be changed to reflect that decrease.

In November of 2012 Oklahoman's overwhelmingly passed State Question 748. This State Question amended Article X § 8B of The State Constitution. This amendment extends additional tax savings to agricultural land and also to properties that qualify for homestead exemption. These two classifications of property now have a 3% limitation to increases in their fair cash value. Previously increases to these same property values were not to exceed 5%.

Article X § 8B. Limit on Percentage of Fair Cash Value of Real Property

Despite any provision to the contrary, on and after January 1, 2013, the fair cash value of any parcel of locally assessed real property shall not increase by more than 5% in any taxable year; provided, if such property qualified for a homestead exemption or is classified as agricultural land, any increase to the fair cash value of such locally assessed real property in a taxable year shall be limited to 3%. The provisions of this section shall not apply in any year when title to the property is transferred, changed, or conveyed to another person or when improvements have been made to the property. If title to the property is transferred, changed, or conveyed to another person, the property shall be assessed for that year based on the fair cash value as set forth in Section 8 of Article X of this Constitution. If any improvements are made to the property, the increased value to the property as a result of the improvement shall be assessed for that year based on the fair cash value as set forth in Section 8 of Article X of this Constitution. The provisions of this section shall not apply to any personal property which may be taxed ad valorem or any property which may be valued or assessed by the State Board of Equalization.

If you currently hold properties that meet the criteria mentioned above, no further action should be required.  However, if you are eligible, but do not currently have homestead exemption on your primary residence an application for this benefit and the 3% limitation that coincides with it is required.  Download applications here or to learn more about homestead exemption please go here.

 Feel free to call us at 405-713-1249 Monday-Friday 8:00 am - 4:45 pm.

Attorney General's Office Opinion

Regarding the 5% Limitation

Appellant:

• The Honorable Russ Roach State Representative, District 66 State Capitol, Room 400 B Oklahoma City, Oklahoma 73105
• The Honorable Mark Liotta State Representative, District 77 State Capitol, Room 500 Oklahoma City, Oklahoma 73105
• The Honorable Tad Jones State Representative, District 9 State Capitol, Room 539 B Oklahoma City, Oklahoma 73105
• The Honorable Penny Williams State Senator, District 33 State Capitol, Room 415 Oklahoma City, Oklahoma 73105
• The Honorable Dave Herbert State Senator, District 42 State Capitol, Room 426 Oklahoma City, Oklahoma 73105
• The Honorable Wes Lane District Attorney, 7th District 320 Robert S Kerr Avenue, Suite 505 Oklahoma City, Oklahoma 73102

Jurisdiction: Attorney General of Oklahoma - Opinion
Hearing Date: September 7, 2001
Text of Rule:
Dear Senators, Representatives, and District Attorney Lane:

Questions

This office has received your requests for an official Attorney General Opinion addressing, in effect, the following questions (all questions are addressed in the article below):

1. Assuming that the provisions of Article X , Section 8B of the Oklahoma Constitution relating to transfers of title or other exceptions to the general rule are not applicable, if the fair cash value of a parcel of locally assessed real property increases by more than 5% from one year to the next, does Section 8B limit the increase in fair cash value (for purposes of computing the taxable value of that parcel for ad valorem tax purposes) to a maximum of 5% for such assessment year?
2. Assuming the same conditions posed in your first question, if the fair cash value of the same parcel of locally assessed real property were to increase by more than 5% in the succeeding assessment year, may a county assessor increase the fair cash value of that parcel by more than 5% of the fair cash value for the parcel established during the preceding assessment year?
3. If a county assessor increases the fair cash value of a parcel of locally assessed real property which is subject to the provisions of Article X , Section 8B of the Oklahoma Constitution by 5% each year, based upon information which supports a determination that any such increase is not in excess of the actual fair cash value of the parcel, does this practice violate either Section 8B or 68 O.S. 2817.1 (2000)?
4. Do the provisions of Section 8B of Article X of the Oklahoma Constitution mean that the assessed (taxable) value of a parcel of locally assessed real property cannot increase more than 5% each year?
5. If the actual fair cash value for a parcel of locally assessed real property increases by 20% in a single year, does the Oklahoma Constitution either authorize or require a county assessor to increase the fair cash value of the parcel, for ad valorem tax purposes, at the 5% annual maximum prescribed by Section 8B of Article X of the Oklahoma Constitution until the 20% increase is reflected on the assessment roll, or do the provisions of 68 O.S. 2817.1 (2000) require a different result?
6. Is the correct interpretation of Section 8B of Article X of the Oklahoma Constitution, together with 68 O.S. 2817.1 (2000), that it is legally permissible for a county assessor to increase the fair cash value of the relevant category of real property by less than 5% each year or alternatively, if there is no supportable increase in the fair cash value of such property, should there be any increase in the value of the property at all?

Background

Assessment of ad valorem taxes begins with the establishment of a fair cash value for each taxable piece of property. See OKLA. CONST. Article X , Section 8(A) / Article X , Section 8(B) / Article X , Section 8C; 68 O.S. 2817(A) / 68 O.S. 2817(B). The fair cash value is then multiplied by an assessment ratio to set the assessed valuation. Id. 68 O.S. 2802(5). From the assessed valuation are subtracted any exemptions to establish a taxable value for each piece of property. Id. 68 O.S. 2802(27). The taxable value is multiplied by the millage rate to calculate the total taxes due on each property. Id. 68 O.S. 2802(22).

Assessment of ad valorem taxes begins with the establishment of a fair cash value for each taxable piece of property. See OKLA. CONST. Article X , Section 8(A) / Article X , Section 8(B) / Article X , Section 8C; 68 O.S. 2817(A) / 68 O.S. 2817(B). The fair cash value is then multiplied by an assessment ratio to set the assessed valuation. Id. 68 O.S. 2802(5). From the assessed valuation are subtracted any exemptions to establish a taxable value for each piece of property. Id. 68 O.S. 2802(27). The taxable value is multiplied by the millage rate to calculate the total taxes due on each property. Id. 68 O.S. 2802(22).    

I. Assuming that the provisions of Article X , Section 8B of the Oklahoma Constitution relating to transfers of title or other exceptions to the general rule are not applicable, if the fair cash value of a parcel of locally assessed real property increases by more than five percent (5%) from one year to the next, does Section 8B limit the increase in fair cash value (for purposes of computing the taxable value of that parcel for ad valorem tax purposes) to a maximum of five percent (5%) for such assessment year?

In 1996, pursuant to referendum, Article X , Section 8 of the Constitution was amended to place limits on the assessment ratio applied to property subject to ad valorem tax. Section 8 now reads in pertinent part:

"2. Real property shall not be assessed for ad valorem taxation at a value less than eleven percent (11%) nor greater than thirteen and one-half percent (13.5%) of its fair cash value for the highest and best use for which such property was actually used, or was previously classified for use, during the calendar year next preceding the first day of January on which the assessment is made."

Id. In addition to amending Section 8 at the 1996 election, the voters also approved the adoption of Section 8B which limits annual increases in fair cash value to not more than five percent (5%) in any taxable year:

"Despite any provision to the contrary, the fair cash value of any parcel of locally assessed real property shall not increase by more than five percent (5%) in any taxable year. The provisions of this section shall not apply in any year when title to the property is transferred, changed, or conveyed to another person or when improvements have been made to the property. If title to the property is transferred, changed, or conveyed to another person, the property shall be assessed for that year based on the fair cash value as set forth in Section 8 of Article X of this Constitution."

Id. A constitutional provision is to be applied to give effect to the intent of the people voting on it. Draper v. State, 621 P.2d 1142, 1145 (Okla. 1980). The intent is determined by the provision itself, and where unambiguous, courts are not at liberty to search beyond the instrument for its meaning. McCurtain County Excise Bd. v. St. Louis-San Francisco Ry. Co., 340 P.2d 213, 216 (Okla. 1959) (citing Shaw v. Grumbine, 278 P. 311 (Okla. 1929)). Neither courts nor legislatures have the authority to augment or diminish the rights granted by the Constitution. Id. Statutes and the Constitution "must be construed as a consistent whole in harmony with common sense and reason and every portion thereof should be given effect if possible. Similarly, construction of such provisions in pari materia with each other should be construed together with other statutes on the same subject as part of a coherent system." Cowart v. Piper Aircraft Corp., 665 P.2d 315, 317 (Okla. 1983) (citing Poafpybitty v. Skelly Oil Co., 394 P.2d 515, 518 (Okla. 1964)).

Prior to the addition of Article X , Section 8B, all real property was valued at its actual fair cash value as of January 1. Fair cash value has been construed by decisions of the Oklahoma Supreme Court to be the property's "fair market value." Bliss Hotel Co. v. Thompson, 378 P.2d 319, 321 (Okla. 1962) (citations omitted).1 In Bliss the Court opined that the fair cash value of the property is synonymous with fair market value which is "the amount of money which a purchaser willing but not obliged to buy the property would pay to an owner willing but not obliged to sell." Id. The concept of fair cash value is still found in Article X , Section 8(A) and 68 O.S. 2817(B) (2000). Section 68 O.S. 2817 provides in pertinent part:

"B. All taxable real property shall be assessed annually as of January 1, at its fair cash value, estimated at the price it would bring at a fair voluntary sale for:

"1. The highest and best use for which the property was actually used during the preceding calendar year; or

"2. The highest and best use for which the property was last classified for use if not actually used during the preceding calendar year."

Id. Both Constitution and statute require, for purposes of ad valorem taxation, that the value of property shall be the fair cash value estimated at the price the property would bring at a fair voluntary sale.

You first ask, if the actual fair cash value of locally assessed real property increases by more than five percent (5%) from one assessment year2 to the next, does Article X , Section 8B of the Oklahoma Constitution limit the increase for purposes of computing the taxable value to a maximum of five percent (5%) for the assessment year. This question may be answered by reviewing Section 8B's provisions. Section 8B provides "the fair cash value of any parcel of locally assessed real property shall not increase by more than five percent (5%) in any taxable year." Therefore, an assessor may not increase the assessed fair cash value3 more than five percent (5%) from one taxable year to the next. In other words, the assessor is limited to increasing the assessed fair cash value by five percent (5%) of the prior year's assessed fair cash value.

II. Assuming the same conditions posed in your first question, if the fair cash value of the same parcel of locally assessed real property were to increase by more than five percent (5%) in the succeeding assessment year, may a county assessor increase the fair cash value of that parcel by more than five percent (5%) of the fair cash value for the parcel established during the preceding assessment year?     

Your second question asks, if the fair cash value of property were to increase by more than five percent (5%) in a succeeding assessment year, may the county assessor increase the fair cash value established during the preceding assessment year? Again, this question may be answered by a review of Article X , Section 8B of the Oklahoma Constitution.

In the event property is transferred, changed or conveyed to another person, that property is assessed based on the fair cash value as set forth in Article X , Section 8. If none of these events occurs, the property is assessed within the limits as provided in Article X , Section 8B. Section 8B limits increases to fair cash value. It does not "freeze" values. Section 8B does not specifically state that the five percent (5%) limit is to be made in reference to any particular year. To be consistent with the annual assessment requirement it must, however, be applied in reference to the prior taxable year. Therefore, a $100,000 property could be valued at not more than $105,000 in the second year. If the property were actually worth more than $105,000, in the third year the value could be increased to not more than $110,250.4

The assessor is limited to increasing the assessed fair cash value by five percent (5%) of the prior year's value.

III. If a county assessor increases the fair cash value of a parcel of locally assessed real property which is subject to the provisions of Section 8B of Article X of the Oklahoma Constitution by five percent (5%) each year, based upon information which supports a determination that any such increase is not in excess of the actual fair cash value of the parcel, does this practice violate either Section 8B or 68 O.S. 2817.1 (2000)?

To implement Section 8B the Legislature adopted 68 O.S. 2817.1 (2000) which provides:

"A. For purposes of implementing Section 8B of Article X of the Oklahoma Constitution, the fair cash value of locally assessed real property shall not be automatically increased five percent (5%) each year, the five percent limitation on the increase in the fair cash value shall not be cumulative, and the five-percent limitation shall not be considered as a twenty-percent increase every four (4) years."

Id. (emphasis added). At the same time that Section 68 O.S. 2817.1 was adopted, the Legislature enacted 68 O.S. 2819 (2000) which provides for the determination of taxable value:

"Taxable values of real and personal property shall be established in accordance with the requirements of Sections 8, 8B and 8C of Article X of the Oklahoma Constitution. The county assessor shall determine the taxable value of all taxable property that the assessor is required by law to assess and value and shall determine such taxable value in accordance with the requirements of Sections 8, 8B and 8C of Article X of the Oklahoma Constitution."

Id. The provisions of Section 68 O.S. 2817.1 have not been interpreted by any court. Section 68 O.S. 2817.1(A) provides that the five percent (5%) increase shall not be automatic, cumulative or considered as a twenty-percent increase every four (4) years. Nothing in Article X , Section 8B mandates an automatic increase. See id. An increase in the Section 8B fair cash value would have to be based on a determination that the actual fair cash value is in excess of the assessed fair cash value. See id.

When read in context with the definition of fair cash value found in 68 O.S. 2802(18)5 and the 68 O.S. 2817.1(A) (2000) provision that the five percent (5%) limitation shall not be considered as a twenty-percent increase every four (4) years, the most logical interpretation of "cumulative" is that an assessor may not accumulate unused increases and apply them all in one year.

The law requires annual assessments for purposes of ad valorem tax. 68 O.S. 2817(A), 68 O.S. 2817(B) (2000). Pursuant to Section 68 O.S. 2817(B), property is to be assessed annually at "its fair cash value, estimated at the price it would bring at a fair voluntary sale." Id. This requirement of annual assessment at fair cash value is in place regardless of whether the property is subject to the Section 8B limitations. Therefore, reading the Constitution and statutes as a whole, an assessor is required to determine each year a property's actual fair cash value as defined in Section 68 O.S. 2802(18). To the extent this value is in excess of the prior year's fair cash value as capped (i.e. assessed fair cash value), the assessor must increase the prior year's assessed fair cash value, but such an increase may not exceed five percent (5%) from one taxable year to the next.

Prior to the addition of Section 68 O.S. 813, property was valued at its fair cash value as of January 1 with no limitations as to increases from the value established in the prior year. Section 813, however, limits increases to five percent (5%) for any taxable year. Statutes and Constitutions "must be construed as a consistent whole in harmony with common sense and reason and every portion thereof should be given effect if possible." Cowart, 665 P.2d at 317. Both Article X , Section 8 and 68 O.S. 2817 (2000) mandate assessment of property at "its fair cash value." An assessor is, therefore, obligated to continue to determine a property's "fair cash value" as of January 1. The provisions of Section 8B and Section 2817.1 limit increases to not more than five percent (5%) in any taxable year, but do not relieve the assessor of his or her constitutional and statutory obligation to assess the property at its fair cash value. Therefore, reading Sections 8 and 813, and Sections 68 O.S. 2817 and 68 O.S. 2817.1, in harmony with each other, an assessor must increase the fair cash value of taxable property each year until such time that the "assessed fair cash value" equals the "actual fair cash value." If this requires an increase of more than five percent (5%) from one taxable year to the next, the provisions of Section 8B limit the increase to five percent (5%).

IV.Do the provisions of Section 813 of Article X of the Oklahoma Constitution mean that the assessed (taxable) value of a parcel of locally assessed real property cannot increase more than five percent (5%) each year?

As stated above, the assessed and taxable values of property are derived from calculating fair cash value. Assessed value is defined in 68 O.S. 2802(5) (2000) as:

"The taxable value of real or personal property either of individual items of personal property or parcels of real property or the aggregate total of such individual taxable items or parcels within a jurisdiction." Id.

Taxable value is defined in 68 O.S. 2802(27) (2000) as:

"The percentage of fair cash value, less applicable exemptions, upon which an ad valorem tax rate is levied pursuant to the provisions of Section 8 of Article X of the Oklahoma Constitution." Id.

Both assessed and taxable value are specifically defined terms. Both are derived from "fair cash value." Neither is synonymous, however, with "fair cash value." The limitations found in Section 8B only apply to "fair cash value" and therefore do not directly limit increases in assessed (taxable) value.

V. If the actual fair cash value for a parcel of locally assessed real property increases by twenty percent (20%) in a single year, does the Oklahoma Constitution either authorize or require a county assessor to increase the fair cash value of the parcel, for ad valorem tax purposes, at the five percent (5%) annual maximum prescribed by Section 8B of Article X of the Oklahoma Constitution until the twenty percent (20%) increase is reflected on the assessment roll, or do the provisions of 68 O.S. 2817.1 (2000) require a different result?

Your fifth question poses a scenario wherein the fair cash value of locally assessed real property increases by twenty percent (20%) in a single year. You ask if it violates the Constitution or 68 O.S. 2817.1 (2000) for an assessor to make annual five percent (5%) increases until the locally assessed property is assessed at its actual fair cash value. Section 8B of Article X does not change the requirement that property be valued at its actual cash value; it merely limits annual increases to five percent (5%). Therefore, a county assessor must increase the assessed fair cash value of the parcel by five percent (5%) each year, until the parcel is assessed at its actual fair cash value. Section 68 O.S. 2817.1 does not relieve an assessor of his or her constitutional and statutory duty to assess property at its fair cash value, subject to the limitations found in Section 8B.

VI.Is the correct interpretation of Section 8B of Article X of the Oklahoma Constitution, together with 68 O.S. 2817.1 (2000), that it is legally permissible for a county assessor to increase the fair cash value of the relevant category of real property by less than five percent (5%) each year or alternatively, if there is no supportable increase in the fair cash value of such property, should there be any increase in the value of the property at all?

Property is to be assessed each year at its fair cash value. See 68 O.S. 2817(B) (2000). When a property's actual fair cash value exceeds its assessed fair cash value, an assessor must increase the value until the assessed fair cash value equals the actual fair cash value. If this requires an increase of more than five percent (5%) the limits found in Section 8B apply, unless the property has been transferred, changed, conveyed or improved. If actual fair cash value is less than five percent (5%) more than its assessed fair cash value, the assessor may only assess the property at its actual fair cash value. If the value of the property has decreased from the prior year and is less than the prior year's assessed fair cash value, the assessor must reduce the assessed fair cash value to its actual fair cash value. There is no limit on the percentage or amount a property may be decreased in a year.

It is, therefore, the official Opinion of the Attorney General that:

1. If the fair cash value of a parcel of locally assessed real property increases by more than five percent (5%) from one year to the next, Article X , Section 8B of the Oklahoma Constitution limits the increase in assessed fair cash value to a maximum of five percent (5%) for such assessment year.

2. Pursuant to Article X , Section 8B of the Oklahoma Constitution, if the fair cash value of a parcel of locally assessed real property increases more than five percent (5%) in succeeding assessment years, a county assessor cannot increase the assessed fair cash value of that parcel by more than five percent (5%) of the assessed fair cash value for the parcel established during the preceding assessment year.

3. a. Article X , Section 8 of the Oklahoma Constitution and 68 O.S. 2817 (2000) require a county assessor to value taxable property at its fair cash value. An assessor must increase the assessed fair cash value of a parcel of locally assessed real property which is subject to the provisions of Article X , Section 8B of the Oklahoma Constitution by five percent (5%) each year until the assessed fair cash value is within 5% of the actual fair cash value, and in the following year by whatever percentage less than 5% is required to make the assessed fair cash value equal to the actual fair cash value.

b. It does not violate Article X , Section 8B of the Oklahoma Constitution and 68 O.S. 2817.1 (2000), for an assessor to increase the assessed fair cash value of real property from a preceding year until the assessed fair cash value reaches the actual fair cash value.

4. The limitations found in Article X , Section 8B of the Oklahoma Constitution apply only to fair cash value and do not directly limit increases in the assessed (taxable) value of a parcel of locally assessed real property.

5. If the actual fair market value for a parcel of locally assessed real property increases by twenty percent (20%) in any taxable year, the Oklahoma Constitution and 68 O.S. 2817 (2000) require a county assessor to increase the fair cash value of the parcel, for ad valorem tax purposes, at the five percent (5%) annual maximum prescribed by Section 8B of Article X until the twenty percent (20%) increase is reflected on the assessment roll.

6. Article X , Section 8B of the Oklahoma Constitution together with 68 O.S. 2817 and 68 O.S. 2817.1 (2000) mandate that a county assessor must increase the fair cash value of the relevant category of real property by less than five percent (5%), if such an increase is required to assess the property at its actual fair cash value.

There can be no increase in the assessed fair cash value unless such increase is necessary to reflect the actual fair cash value.

( Douglas F. Price )

Footnotes

• The Bliss definition is now the statutory definition found at 68 O.S. 2802(18) (2000).
• The terms "assessment year" and "taxable year" are used interchangeably in the Ad Valorem Code. The taxable year is not defined in the Code. Title 68 O.S. 2802(8) (2000) defines assessment year: "Assessment year' means the year beginning January 1 of each calendar year and ending on December 31 preceding the following January 1 assessment date." Id.
• "Assessed fair cash value" as used in this Opinion, is the fair cash value as capped by Oklahoma Constitution Article X , Section 8B limitation.
• $105,000 x 1.05 = $110,250.
• "Fair cash value' means the value or price at which a willing buyer would purchase property and a willing seller would sell property if both parties are knowledgeable about the property and its uses and if neither party is under any undue pressure to buy or sell and for real property shall mean the value for the highest and best use for which such property was actually used, or was previously classified for use, during the calendar year next preceding the applicable January 1 assessment date." 68 O.S. 2802(18) (2000).
  Disposition: See: Opinion Number 02-030 (2002)
  Citation: 01-036 (2001)

Oklahoma Constitution Title 68

Section 2802.1

Amendment to SECTION X-8B
*Limit on percentage of fair cash value of real property.

Despite any provision to the contrary, the fair cash value of any parcel of locally assessed real property shall not increase by more than 5% in any taxable year. The provisions of this section shall not apply in any year when title to the property is transferred, changed, or conveyed to another person or when improvements have been made to the property. If title to the property is transferred, changed, or conveyed to another person, the property shall be assessed for that year based on the fair cash value as set forth in Section 8 of Article X of this Constitution. If any improvements are made to the property, the increased value to the property as a result of the improvement shall be assessed for that year based on the fair cash value as set forth in Section 8 of Article X of this Constitution. The provisions of this section shall be effective January 1, 1997, and thereafter for counties which are in compliance with the applicable law or administrative regulations governing valuation of locally assessed real property as of such date. For counties which are not in compliance with such law or regulations as of January 1, 1997, the provisions of this section shall be effective January 1 of the year following the date the county is deemed to be in compliance with such laws or regulations as provided by law. The provisions of this section shall not apply to any personal property which may be taxed ad valorem or any property which may be valued or assessed by the State Board of Equalization.

The Legislature shall enact any laws necessary to implement the provisions of this section.
[1] Added by State Question No. 676, Legislative Referendum No. 306, adopted at election held on November 5, 1996. EDERIV

State Question 676

5% Value Limitation

This measure amends Article 10 of the Oklahoma Constitution. It adds a new section 8B. This measure limits the fair cash value of real property for property tax purposes. The fair cash value would not increase by more than 5% in any taxable year. This limit would only apply to real property which is assessed by a county assessor. If the property is transferred, changed, or conveyed, the limitation would not apply for that year.

The limitation does not apply if improvements have been made to the property. If improvements have been made to the property, the increased value to the property will be assessed for that year. Any county which is not in compliance with laws or regulations governing valuation of property would not be allowed to apply the 5% limitation. This measure does not apply to personal property. The measure does not apply to property valued or assessed by the State Board of Equalization. The legislature would be allowed to enact laws to implement this section. This measure takes effect on January 1, 1997.

State Question 676 Summarized

The 5% limitation is not an automatic increase every year for every property. The limitation is utilized for those properties where the true market value is more than the limited or capped taxable value. This concept was confirmed by the attorney general in an opinion in September of 2001. To see the full outline of the Attorney General's opinion click here Attorney General Opinion.

The 5% limitation is not an automatic increase every year for every property. The limitation acts as a "phase-in" tool to hold back substantial increases when there is a strong demand in the real estate market causing rapid increases in property values. When market conditions reflect that property values have increased greater than 5% the limitation allows only a gradual increase rather than the true increase based on the market value.

Actual property taxes can increase by more than 5%. The 5% limitation relates only to real property value not property tax. Increases in millage rates, which are used in calculating property taxes, usually are a result of a vote from bond issues that may be county wide and/or related to a particular city or school district. These voter approved issues have no bearing on the 5% limitation law.

Tax Savings Measures

Tax Savings Measures in Place...Seeing is Believing

Last year Oklahoma County residents saved more than $42.88 million under the provisions of a 5% and 3% limitation. Since the legislation was passed, county residents have saved more than $906 million in lower property taxes. The graph below illustrates the yearly savings and indicates just how strong the real estate market is in Oklahoma County.

Foreclosure Sales

Sales are generally considered invalid as arm's-length transactions if they involve:

• Charitable, religious, or educational institutions
• Financial institutions as buyer or seller
• Forced sales resulting from a judicial order
• Government agencies
• Sales of doubtful title
• Sales settling an estate
• Transactions between relatives or corporate affiliates
• Foreclosures

Arm’s-Length Sales

An arm's-length sale occurs when both parties act in their own best interest with no duress to complete the transaction.