IAAO 402 Exam Questions and Verified Solutions ( Already Passed)

IAAO 402 Exam Questions and Verified Solutions ( Already Passed) A $25000 homestead exemption is an example of a ________________________________. - Answers partial exemption Administratively, the functions of a property tax system are: - Answers To identify and link taxable subjects (taxpayers) and taxable objects (property) Produce tax assessments Collect taxes All else being equal, when taxes rise, capitalization means that: - Answers property values fall All of the following are common examples of shared responsibilities between governments EXCEPT: - Answers Property tax levy limits Property tax valuation programs which require states to assess railroads and counties to assess other business property. State provided collection assistance for local sales taxes The International Fuels Tax Agreement (IFTA) All of the following are possible advantages of a tax increment financing EXCEPT: - Answers New businesses may become more competitive than previously existing businesses. Start up costs may be lessened Development of depressed areas may be facilitated Bonding or financial leverage may be provided Analytical studies that provide information in a neutral, non-judgmental way are __________________________. - Answers positive The _____________________ approach is purely factual without judgments. - Answers positive The ________________ approach starting point includes value judgments. - Answers normative As a percentage of general revenue, which local governments rely most heavily on charges? - Answers Special Districts (sewer, fire, cemetery) Assessed value increases are more closely tied to tax and revenue increases in a _____________________ driven system. - Answers rate An assessment system in which fractional ratios are applied to appraised values is _________________. - Answers classification Assessment systems in which taxable value reverts to market value at time of sale are known as _________________________________________________________. - Answers acquisition value systems An assessment system that underassesses residential property even though such undersassessment is not permitted by law is providing a _____________________________. - Answers de facto exemption Assume that a taxpayer has appealed her or his assessment and has assembled evidence that the assessment is relatively higher than the assessments of comparable properties, which of the following is the most professionally responsible way to deal with the appeal? - Answers None of the above Assure the appellant that the assessment in question is well below the legal standard. Assure the appellant that her or his property is valued consistently with all other properties in its class and than granting the appeal would reduce overall valuation uniformity. Assure the appellant that the district's mass appraisal procedures meet or exceed all legal and professional standards. Because some school districts have more property wealth per pupil than others, states have developed _______________________ systems to level this playing field. - Answers equalization The characteristic of a tax system that reflects on the degree to which economic efficiency is altered is _____________________________. - Answers neutrality Circuit breaker tax relief programs_______________________________________________________. - Answers often target low income, elderly or disabled taxpayers. Comparing state and local government revenue in 1927 to those in 2007, or any distant years would be misleading without adjusting for _______________________________________, _____________________________ and _________________________________________. - Answers price inflation population growth economic (income) growth A comparison of actual tax collections to tax capacity results is something called ________________________________. - Answers tax effort Current market value assessment systems are more concerned with the ____________________________ of the property tax. - Answers distribution Federalism is________________________________________________________________________________________________________________________. - Answers a form of government in which power is constitutionally divided between a national government and state government. ____________________________, ___________________________, ____________________________ and _______________________________ are countries with federal systems of government. - Answers United States Australia Canada Germany __________________________ ________________________ is a tax on consumption (alcohol, tobacco, gambling). This is considered inelastic - people are going to buy it no matter the cost. - Answers Sumptuary Tax Democracies tend to be promoted by _______________________ economic systems. - Answers capitalist Describe in general terms how current property tax systems in the US differ from earlier property tax systems. - Answers Current systems are almost exclusively used to provide local, rather than state, revenue. Current systems are much narrower, in that they tend to tax tangible property more than intangible property and real property more than personal property. Describe the major disadvantage of fractional assessment ratio (classification) systems. - Answers Lessens system understadability ____________________________________ and _____________________________ describe two means by which state governments restrict local governments' revenue raising authority in your state. - Answers spending limitations elections or super-majority required for new taxes etc An example of a mechanism sometimes used to temporarily relieve property tax burden is __________________________ _______________________. - Answers tax deferral Exemptions often shift property taxes to less favorited property tax payers. _________________________ is one way to prevent this type of shift without reducing taxing district revenue. - Answers substitute funding such as revenue sharing, state aide, user fees, or local non-property taxes.