New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1912-07-17
TAXATION IN MINNESOTA
TWENTY-FIFTH ARTICLE
Equalization by the Tax Commits.
sion

After the county board of equaliza.
ton has completed it's work the coun'
ty auditor prepares an abstract of as
sessment of property in each of the
towns, villages and cities of the coun-
ty showing, in separate columns the
assessed value of land, the assessed
value of structures and improvements
thereon, and the assessed value of
each class of personal property. This
abstract is forwarded to the tax com.
mission on or before the fourth Mon
day in August.
Prior to 1909 the final equalization
Of assessed values was vested in a
state board of equalization consisting
of the governor, the state auditor, the
attorney general, and one member
from each judicial district of the state.
This board was abolished in January,
1909, by act of the legislature, and the
duties and powers vested in it were
transferred to the tax commission.
At the outset of it's work as state
board Of equalization the tax commits
sion decided to get away as far as
possible from the arbitrary method Of
determining values that had hereto
fore been followed, especially in re-
latlon to real estate, and to substitute
some method that would afford a uni
form measure of value for all the coun-
ties of the state.
After a careful study of all known
methods it was concluded that, all
things considered, the so-called "sales
method afforded the most reliable
measure of true values that could be
devised. This plan commended itself
to the commission not only because of
its apparent intrinsic value, but more
especially because it was not an un-
tried experiment. 1t had been used
in Wisconsin and in some taxing dis
tricts of other states with very salts
factory results.
Briefly stated, the "sales method"
consists in obtaining from each coun-
ty of the state data showing all bona
fide sales of real estate during a given
period with the true consideration
paid for each tract or lot transferred
and the assessed value of the same as
shown by the last real estate assess
ment. With this information it is a
simple matter to determine the per-
centage of assessed to true value.
The method is based upon the propo-
sition that nothing else so fairly meas
ures the true value of real estate as
the price actually paid for it in a nor
NAL transaction, and by normal
transaction is meant, an owner will
ing but not obliged to sell, and a
purchaser willing but not obliged to
buy. It is the best measure of value
that the commission has been able to
find, because each sale made under
such conditions represents the judg.
ment of at least two minds-the seller
and the buyer-as to the true value
of a given piece of property. 1t is
universally recognized by courts as
the best evidence of value, and in the
final analysis is the basis of nearly all
expert opinions in such matters.
Having ascertained the actual con.
sideration in all bona fide sales of
property in each town, village and
city of a county during given period,
together with the assessed value of the
same, it is a simple mathematical cal
culation to find the average ratio or
per cent of assessed to true value.
The formula may be stated as follows:
"As the assessed value of the lands
sold is to the consideration paid for
them, so is the assessed valuation of
the real estate of the entire county
to the full and true value thereof"
The next article will show how the
data for the "sales method is gath
cred and what use is made of it.
In these days of high cost of living