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How Are Missouri State Property Taxes Assessed?

Property taxes provide critical funding for more than 250 local governments in Missouri. They provide revenue for local services like police, fire and rescue, street maintenance, senior citizen programs, schools, hospitals, parks and recreation, and emergency medical services. Today’s post explains how your Missouri Electric Cooperative’s property taxes are assessed.

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Property Assessment and Local Tax Rate

Your Cooperative’s property tax is determined based on its property tax assessment and its local government tax rates. Assessment, according to the Missouri State Assessors Association, is, “the process of placing value on a property for the purpose of property taxation.”

County assessors conduct property tax assessments, but the assessment system falls under the oversight of the Missouri State Tax Commission. Property tax rates are set by your local government — usually by your county, but sometimes by your city.

How Often are Cooperatives Assessed?

Assessments occur every odd-numbered year. Once a property has an initial assessment, it is reassessed every odd-numbered year after that. Assessments and reassessments allow your Cooperative to know that they’re paying a fair tax rate, and they also give your Cooperative peace of mind that any changes in the value of the Cooperative’s property are accounted for.

Nonprofit but not Exempt

While some nonprofit and governmental organizations like churches and schools are exempt from property taxes, your nonprofit Electric Cooperative is not exempt from paying property taxes. In fact, it falls under its own special set of Missouri Assessor’s Manual guidelines.

Chapter VII of the Missouri Assessor’s Manual explains exactly how Missouri’s Electric Cooperatives are assessed. The guidelines outlined in the Assessor’s Manual are developed by the State Tax Commission and “are furnished to each county assessor for the valuation of Rural Electric cooperatives (RECs).”

The Cost Approach

Each county assessor is responsible for determining your Cooperative’s assessed value. They do this using a method called the cost approach. Using the cost approach, the assessor subtracts your Cooperative’s “obsolescence” from the net value of its production, distribution, transmission, and transformer plant(s).

In assessment terms, “obsolescence” is a way to account for the lost value of property or equipment that happens over time or that results from outside factors. One example of obsolescence is when a Cooperative’s equipment is outdated. Another is the lost value of a Cooperative’s property when neighboring property development prevents the Cooperative from being able to make necessary expansions.

Paying Taxes to Support Your Community

Each year, your Cooperative pays hundreds of thousands of dollars or more in local property taxes that support important social services like health care, education, and emergency management. The next time you pay your Cooperative electricity bill, you can rest easy knowing that your Cooperative invests part of your payment back into your local community by paying annual property taxes.

Learn more about Missouri’s Electric Cooperatives, and how we work to provide safe, efficient energy to rural Missouri by following us on Facebook, Twitter, YouTube, and Instagram.

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