To the extent allowed by local option, commercial and industrial facilities that are constructed, altered, installed or improved after July 1, 1976 (or some later date set by the taxing jurisdiction) at a cost exceeding $10,000 (or some higher minimum chosen by the taxing unit) are partially exempt from taxation and special ad valorem levies, but are liable for special assessments. However, initial exemptions granted on or after 8/5/97 are liable for special ad valorem levies established for fire district, fire protection district, and fire alarm district purposes. The exemption may be granted only after the construction or improvement project has been completed.

State law allows the exemption to be granted to facilities used primarily for the buying, selling, storing, or development of goods or services, the manufacture or assembly of goods, or the processing of raw materials; however, local taxing jurisdictions may restrict exemption to only some types of businesses in any or all of these categories. If they are not excluded from eligibility by the taxing jurisdiction, the exemption also applies to hotels and motels, but not to property used primarily for the furnishing of other types of dwelling accommodations to residents or transients. A taxing jurisdiction that restricts the exemption by type of business may also restrict it to one or more specific geographic areas.

Generally the amount of the exemption in the first year is 50% of the increase in the assessed value attributable to the improvement. The exemption amount then decreases by 5% in each of the next nine years. This declining percentage continues to be applied to the increase in assessed value determined in the first year of the exemption, unless there is a change in level of assessment for an assessment roll of 15% or more, as certified by the Office of Real Property Tax Services, in which case an adjustment is required. A municipality which restricts the exemption to specific types of property and geographic areas may establish a different exemption schedule (i.e., 50% for one, two and three; 40, 30, 20% in years four, five and six; 10% in years seven, eight and nine; and 5% in year ten). Consult your assessor to ascertain the specific schedule or schedules that apply.

RP-485b Exemption Application

RP-485b Instructions