CAE CAE Tax Policy and Assessment Administration 2

Question 1

What is the primary difference between a tax levy and a tax rate?

Accepted Answer

A levy is the total amount of tax to be collected; a rate is applied per unit of value

Answer

A levy is set by the assessor; a rate is set by the legislature

Answer

A levy applies to commercial property; a rate applies to residential

Answer

A levy is expressed as a percentage; a rate is expressed in dollars

Question 2

Which concept describes the shifting of the property tax burden from owners to tenants through higher rents?

Accepted Answer

Tax shifting

Answer

Tax capitalization

Answer

Tax incidence

Answer

Tax pyramiding

Question 3

What is the role of the equalization factor (multiplier) in property tax administration?

Accepted Answer

It adjusts assessed values to achieve a uniform assessment level statewide

Answer

It converts market value to assessed value at the local level

Answer

It reduces taxes for qualifying low-income homeowners

Answer

It adjusts the tax rate for inflation annually

Question 4

Which of the following best describes 'tax capitalization' in property assessment?

Accepted Answer

The reduction in market value caused by high property taxes relative to comparable properties

Answer

The process of converting income to value

Answer

The conversion of personal property to real property for tax purposes

Answer

The method of spreading a tax increase over multiple years

Question 5

What is the typical consequence of a jurisdiction having a Price-Related Differential (PRD) greater than 1.03?

Accepted Answer

Lower-value properties are over-assessed relative to higher-value properties

Answer

Higher-value properties are over-assessed relative to lower-value properties

Answer

All property classes are assessed uniformly

Answer

The jurisdiction must lower its tax rate

Question 6

Which provision commonly limits the annual increase in a property's assessed value in many U.S. states?

Accepted Answer

Assessment cap or limitation

Answer

Homestead exemption

Answer

Circuit breaker credit

Answer

Tax increment freeze