TR-2011-50 CHAPTER 59 CLAUSE 41D q
Lf I-D
FA Town of Agawam
Assessor's Office
3 6 Main St, Agawam, Massachusetts 0 100 1-18 3 7
Tel. 413-786-0400 X258 Fax 413-786-9927
Email: assessor@agawam.ma.us
TO: Finance Subcommittee, City Council
FROM: Kevin Baldini, Assessor
SUBJECT: Clause 4 1 C and 17D Exemptions
DATE: September 26, 2011
The changes to the exemption parameters are as follows:
Clause 41C-Senior Exemption Current Proposed
Income Limits Single From $13,000 To $16,500.
Married From $15,000 To $22,500 .
Asset Limits Single From $28,000 To $34,000
Married From $30,000 To $42,500
Exemption Amt From $500 To $1,000
The qualifying person must be at least 70 years old by July I of the year to which the exemption applies. The income
limits are a net amount after a standard deduction for social security/retirement allowance set by the Department of
Revenue. The standard deduction for the past three fiscal years has been $4,158 for a single person and $2,079 for their
spouse, for a total for a married couple of$6,237.
If the change to the income and asset limits is passed by the City Council, then the passage of Clause 41 D will
automatically tie those amounts to changes in the Consumer Price Index as given to communities annually by the DOR.
Clause 17D-Senior/Surviving Spouse/Minor exemption is being proposed for change also. The current asset limit is
$40,000 and the current exemption amount is $175.00. The proposed change would automatically tie the asset limit and
exemption amount to a Cost of Living Adjustment as given to the communities by the Commissioner of Revenue. To
qualify, the person must either be 70 by July 1 of the year to which the exemption applies, be a surviving spouse, or
a minor child with a parent deceased who owns and occupies the property.
CLAUSE 41C SENIOR EXEMPTION OPTIONS
Allowable adjustments under2`1 sentence of G.L. Ch. 59 �5141C)-added by St. 2002, Ch. 184 §51
APPLICANT EACH CO-OWNER NOT APPLICANVS SPOUSE
ELIGIBLE AGE Current Law Allowable Adiustmen
70 65
INCOME LIMITS Current Law Allowable Adjustment Current Law— No Adjustment Allowed
Deductions: $13,000 Single Up to $20,000 Single Each Co-owner
(1) Minimum Social Security/ $15,000 Married Up to $30,000 Married $13,000 Single
retirement allowance set by DOR $15,000 Married
each year and (2) business
expenses or losses (i.e., only net
profits/rental income included)
Married limit is combined income of
both spouses
ASSET LIMITS Current Law Allowable Adiustmen Current Law— No Adiustment Allowed
Married limit is combined assets of $28,000 Single Up to $40,000 Single Each Co-owner
both spouses $30,000 Married Up to $55,000 Married $28,000 Single
$30,000 Married
ASSET DEDUCTIONS Current Law Allowable Adiustment Current Law— No Adjustment Allowed
(1) Home up to number of units Up to 3 Family Up to 4 Family Each Co-owner
noted, (2) Registered vehicles, (3) 1 Up to 3 Family
cemetery plots, (4) household
furniture/effects at domicile and (5)
wearing apparel
EXEMPTION AMOUNT Current Law Allowable Adiustment
$500 up to $1000
Aniount prorated by % of applicant's
ownership interest if co-owns with
anyone but spouse
(��r ov-tc�
TR-2011-,50 L bO
A RESOLUTION ADOPTING MASSACHUSETTS GENERAL LAW CHAPTER 59, SECTION 5, CLAUSE 41D
(SPONSORED BY: MAYOR RICHARD A. COHEN)
WHEREAS, Massachusetts General Law 59,Section 5, Clause 41D (M.G.L. c. 59, §5 cl.41D) provides that
a City may attach a real property tax exemption to the Consumer Price Index by adopting M.G.L. c. 59,
§5 cl.41D; and
WHEREAS,the Town of Agawam adopted M.G.L. c. 59, §5 cl.41C in 1986; and
WHEREAS,the City Council may vote to adjust certain factors affecting Senior Citizens contained in
M.G.L. c. 59, §5 cl.41C; and
WHEREAS,the Consumer Price Index is determined by the United States Department of Labor, Bureau
of Labor Statistics annually; and
Whereas,adopting M.G.L. c.59, § 5 cl.41D provides for an automatic adjustment in the income and
asset limits allowable under the statute based on a Cost of Living Adjustment; and
Whereas,the many seniors are on a fixed or limited income; and
NOW THEREFORE, BE IT RESOLVED BY THE AGAWAM CITY COUNCIL the Town of Agawam accept M.G.L.
c. 59, §5 cl. 41D,which authorizes an annual increase in the income limits(gross receipts) and asset
limits(whole estates)for exemptions granted to senior citizens under M.G.L. c. 59, §5 cl.41C, by the
percentage increases in the U.S. Department of Labor Statistics, Consumer Price index for the previous
year as determined by the Commissioner of Revenue,to be effective for exemptions granted for any
fiscal year beginning on or after July 1, 2012,
DATED THIk�61)AY OF 2011.
PER ORDER OF THE AGAWAM CITY COUNCIL umv(k
1617
Donald M. RheAult, President
fAROVED AS 0 FOkM AND-LEGALITY
c_
Vince nt`F!!��ioscia, City Solicitor
MAYORAL ACTION
Received this day of 2011 from Council Clerk.
Signed by Council President this day of LkN , 2011.
APPROVAL OF LEGISLATION
By the powers vested in me pursuant to Article 3, Section 3-6 of the Aga a�
,�Iarter, as
a, ded I hereby approve the passage of the above legislation on this day of
52011.
/,z
Richara A. Cohen, Mayor
DISAPPROVAL OF LEGISLATION
By the powers vested in me pursuant to Article 3, Section 3-6 of the Agawam Charter, as
amended, I hereby veto the passage of the above legislation on this day of
, 2011 for the following reason(s):
Richard A. Cohen, Mayor
RETURN OF LEGISLATION TO COUNCIL CLERK
Returned to Council Clerk this day of ' 2011.
Massachusetts Department of Revenue Divistoo of Local Services
Ta�eetK Bat Coffmssiorer Robal G Nunes Deputy Comrmswff&DlrectOr OtMuRICIP81Aff8ffs
Informational Guideline Release
Bureau of Municipal Finance Law
Informational Guideline Release (IGR) No. 11-206
February 2011
OPTIONAL.COST OF LIVING ADJUSTMENT
FOR
FISCAL YEAR 2012 EXEMPTIONS
(G.L. c. 59, § 5, Clauses 17, 17C, 170/2, 17D, 17E,41,41B,41C and 41D)
This Informational Guideline Release (IGR) infon-ns assessors of the cost of living
adjustment(COLA) to be used in Fiscal Year 2012 by communities that have adopted certain local
options for annually increasing the:
0 Exemption amount granted to senior citizens and surviving spouses and minors under
Clauses 17, 17C, 170/2 or 17D.
0 Asset limits for determining if senior citizens and surviving spouses and minors qualify
for exemption under Clauses 17, 17C, 17CV2 or 17D.
0 Income and asset limits for determining if senior citizens qualify for exemption under
Clauses 41, 41 B or 41 C.
Topical Index Key: Distribution:
Exemptions Assessors
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Informational Guideline Release (IGR)No. H-206
February 2011
OPTIONAL COST OF LIVING ADJUSTMENT
FOR
FISCAL YEAR 2012 EXEMPTIONS
(G.L. c. 59, § 5,Clauses 17,17C, 170/2, 17D, 17E,41,41B,41C and 41D)
SUMMARY:
The Commissioner of Revenue has determined the cost of living adjustment to be used in
Fiscal Year 2012 by communities that have adopted certain local options. Those options allow
communities to increase annually the:
* Exemption amount granted to senior citizens and surviving spouses and
minors under Clauses 17, 17C, 170/2or 17D.
0 Asset limits for determining if senior citizens and surviving spouses and
minors qualify for exemption under Clauses 17, 17C, 17CV2or 17D.
a Income and asset limits for determining if senior citizens qualify for
exemption under Clauses 41, 41 B or 4 1 C.
The cost of living adjustment (COLA) is measured by the increase in the United States
Department of Labor, Bureau of Labor Statistics Consumer Price Index for Urban Consumers,
Boston (CPI-U) for the previous calendar year.
The cost of living adjustment for FYI 2 exemption purposes is 1.65%.
GUEDELINES:
1. 'ADJUSTED EXEMPTION AMOUNT FOR CLAUSE 17s
Communities have the option of increasing each year the amount of the exemption
granted to certain senior citizens and surviving spouses and minors under G.L. c. A § 5.
Clauses 17. 17C, 17CV2or 17D by any Percentage up to the COLA determined by the
Commissioner of Revenue. G.L. c. 59, & 5 provision added by St. 1995, c. 181.
BUREAU OF MUNICIPAL FINANCE LAW KATHLEEN COLLEARY, CHIEF
-2-
A. Local Adoption
I Acceptance
The COLA increases the exemption amount paly in those communities that
accept a G.L. c. 59, § 5 provision added by St. 1995, c. 1$1. Acceptance is by
vote of the community's legislative body, subject to charter. G.L. c. 4, § 4. The
attached or similar language may be used for the vote.
2. Annual Percenine Increa
The percentage by which the exemption amount is increased each year must also
be established by vote of the community's legislative body, subject to charter.
The annual increase cannot exceed the actual COLA for any year. There are
several ways in which a community may establish the annual increase including,
for example, the use of-
A percentage of the prior year's COLA (e.g., The annual increase
will be 100% (or 75%, 50%, etc.) of the COLA.)
A capped increase (e.g., The annual increase will be 2.5%, or the
COLA, whichever is less).
Annual increases established in this manner apply automatically each year until a
new vote is taken establishing a different increase.
Alternatively, an annual vote may be taken to establish the specific percentage
increase for that particular year once the Commissioner of Revenue has
deten-nined the actual COLA for the preceding year.
B. Annual ExeMption Amount
The increases resulting from acceptance of this provision operate cumulatively. Each
year's exemption amount, after application of the voted percentage increase, becomes the
base to which the next year's increase applies.
Example
A community Lirst adopts the local option provision for FYI I and votes to
increase the exemption annually by 100% of the COLA. In FYI 1, the
base $175 exemption increased by 0% and eligible taxpayers received an
exemption of$175 ($175 x 1.0). The FYI 2 exemption amount is
calculated by applying the FY12 COLA to $175. That results in a FY12
exemption amount of$178 ($175 x 1.0 165).
-3-
If an optional additional exemption is granted under St. 1986, c. 73, § 4, the additional
amount is based on the adjusted exemption amount. In the example above, any optional
exemption granted for FYI 2 is based on $178, rather than $175.
C. State Reimbursements
Cities and towns will not receive additional state reimbursement for any increase in the
exemption amount granted under this provision.
11. ADJUSTED ASSET LIMIT FOR CLAUSE 17s
Communities have the option of automatically increasing each year the amount of assets
(whole estate)certain senior citizens and surviving spouses and minors may have and
qualify for an exemption under G.L. c. 59, & 5, Clause 17, 17C, 170/2.or 17D by the
COLA determined by the Commissioner of Revenue. G.L. c. 59, & 5, Clause 17E.
A. Local Adog!Lon
The COLA increases the asset limit only in those communities that have accepted G.L. C.
59, � 5. Clause 17E. Acceptance is by vote of the community's legislative body, subject
to charter. G.L. c. 4, & 4. The attached or similar language may be used for the vote.
B. Annuaf Asset Limit
The asset limit increases resulting from adoption of this provision operate cumulatively.
Each year's new limit, as increased by the COLA, becomes the base to which the next
year's COLA is applied.
Example
A community that operates under Clause 17D first'adopts the local option
provision for FYI 1. In FYI 1, the base asset limit of$40,000 was
increased by 0% and taxpayers qualified for the exemption with assets up
to $40,000 ($40,000 x 1.0). The FY12 asset limit is calculated by
applying the FY12 COLA to $40,000. That results in a FY12 asset limit
of$40,660 ($40,000 x 1.0165).
-4-
C. State Reimbursements
Subject to appropriation, cities and towns operating under Clause 17 will be reimbursed
at the rate of$175 for each exemption granted. Reimbursements for cities and towns
operating under Clauses 17C, 17CV2 and 17D,however, arc fixed at the dollar amount
received in the last year Clause 17 was used and no adjustment will be made if additional
exemptions are granted as a result of accepting this provision.
111. ADJUSTED INCOME AND ASSET LIMITS FOR CLAUSE 41s
Communities have the option of automatically increasing each year the amount of the
income (gross receipts) and assets (whole estate)certain senior citizens may have to
qualify for an exemption under G.L. c. 59, § 5, Clause 41, 41 B and 41 Q by the COLA
determined by the Commissioner of Revenue. G.L. c. 59, § 5, Clause 411).
This option does not adjust the income (-gross receipts) seniors may have to qualify for an
exemption under G.L. c. 59, � 5, Clause 41CV;z. That income limit is tied to the income
limits under the state "circuit breaker" income tax credit, which are automatically
adjusted each year under another law. See Informational Guideline Release(IGR) I I-
208, Clause 41 C�Y;! Property Tax Exemptions for Seniors.
A. Local Adoption
The COLA increases the income and asset limits only in those communities that have
accepted G.L. c. 59, & 5, Clause 41D. Acceptance is by vote of the community's
legislative body, subject to charter. G.L. c. 4, § 4. The attached or similar language may
be used for the vote.
B. Annual Income and Asset Limits
The income and asset limit increases resulting from adoption of this provision operate
cumulatively. Each year's new limit, as increased by the COLX, becomes the base to
which the next year's COLA is applied.
Example
A community that operates under Clause 4 1 C first adopts the local option
provision for FYI 1. In FYI 1, the base income limits of$13,000 for single
taxpayers and $15,000 for married taxpayers were increased by 0%and
taxpayers qualified for the exemption with income of up to $13,000
($13,000 x 1.0) if single and $15,000 ($15,000 x 1.0) if married. The
FY 12 income limits are calculated by applying the FY 12 COLA to
$13,000and $15,000. That results in FY12 income limits of$13,215
($13,000 x 1.0165) and $15,248 ($15,000 x 1.0165).
-5-
In FYI 1, the base asset limits of$28,000 for single taxpayers and $30,000
for married taxpayers were increased by 0%and taxpayers qualified for
the exemption with assets of up to $28,000 ($28,000 x 1.0) if single and
$30,000 ($30,000 x 1.0) if married. The FY12 asset limits are calculated
by applying the FY12 COLA to$28,000 and $30,000. That results in
FYI 2 asset limits of$28,462 ($28,000 x 1.0 165) and $30,495 ($30,000 x
1.0165).
If a community that uses Clause 41 C votes to increase its income or asset limits under
that clause, the COLA will apply to the new higher limits. See IGR No. 02-20-9 Clause
41C Exemption 0 ross receipts
j2tions. For example, a community votes to increase the g
limits for FYI 2 to the new maximum limits of$20,000 and $30,000 for single and
married taxpayers respectively. If Clause 41D is also in effect for FY12, the FY12
COLA of 1.65% would be applied to $20,000 and $30,000, which would result in FY12
income limits of$20,330 if single and $30,495 if married. Those amounts would then
become the base to which the FYI 3 COLA would be applied.
C. State Reimbursements
Subject to appropriation, cities and towns operating under Clause 41 will be reimbursed
at the rate of$500 for each exemption granted. Reimbursements for cities and towns
operating under Clauses 41 B and 4 1 C, however,are capped at the number of exemptions
granted the last year Clause 41 was used.
Exampl.
For FYI 0, a community operates under Clause 41 and grants 100
exemptions. It is reimbursed for 100 exemptions.
For FYI 1, the community adopts Clause 41 C and grants 75 exemptions.
It is reimbursed for 75 exemptions.
For FYI 2, the community adjusts its income and asset limits to the
maximums permitted by Clause 41 C and grants 125 exemptions. It is
reimbursed for 100 exemptions, the number granted in the last year it
operated under Clause 4 1.
TR-201175D
A RESOLUTION ADOPTING MASSACHUSETTS GENERAL LAW CHAPTER 59,SECTION 5,CLAUSE 41D
(SPONSORED BY: MAYOR RICHARD A. COHEN)
WHEREAS, Massachusetts General Law 59,Section 5, Clause 41D (M.G.L.c. 59, §5 cl.41D) provides that
a City may attach a real property tax exemption to the Consumer Price Index by adopting M.G.L. c. 59,
§5 cl.41D; and
WHEREAS,the Town of Agawam adopted M.G.L. c. 59, §5 cl.41C in 1986; and
WHEREAS,the City Council may vote to adjust certain factors affecting Senior Citizens contained in
M.G.L. c. 59, §5 cl.41C; and
WHEREAS,the Consumer Price Index is determined by the United States Department of Labor, Bureau
of Labor Statistics annually;and
Whereas, adopting M.G.L.c.59, §5 cl.41D provides for an automatic adjustment in the income and
asset limits allowable under the statute based on a Cost of Living Adjustment;and
Whereas,the many seniors are on a fixed or limited income; and
NOW THEREFORE, BE IT RESOLVED BY THE AGAWAM CITY COUNCIL the Town of Agawam accept M.G.L.
c. 59,§5 cl.41D,which authorizes an annual increase in the income limits(gross receipts) and asset
limits(whole estates) for exemptions granted to senior citizens under M.G.L.c. 59, §5 cl.41C, by the
percentage increases in the U.S. Department of Labor Statistics, C'onsurner Price index for the previous
year as determined by the Commissioner of Revenue,to be effective for exemptions granted for any
fiscal year beginning on or after July 1, 2012.
DATED THIS DAY OF 2011.
PER ORDER OF THE AGAWAM CITY COUNCIL
Donald M. Rhe5ult, President
6AROVED JAS )0 FO'kM AND LEGALITY
C-
Vfincentll`��ioscia,City Solicitor
Massachusetts 2marfment ofRevenue Division oflocalSarvices
Nat)eetKBa1Cwmzxrw Robeil G Nunes Deputy C017=550W&DIremoMunicipalAffairs 40
Informational Guideline Release
Bureau of Municipal Finance Law
Informational Guideline Release (IGR)No. 11-206
February 2011
OPTIONAL COST OF LIVING ADJUSTMENT
FOR
FISCAL YEAR 2012 EXEMPTIONS
(G.L. c. 59,§ 5,Clauses 17, 17C, 170/2, 17D, 17E,41,41B,41C and 41D)
This Informational Guideline Release (IGR) informs assessors of the cost of living
adjustment(COLA)to be used in Fiscal Year 2012 by communities that have adopted certain local
options for annually increasing the:
• Exemption amount granted to senior citizens and surviving spouses and minors under
Clauses 17, 17C, 17CV2 or 17D.
• Asset limits for determining if senior citizens and surviving spouses and minors qualify
for exemption under Clauses 17, 17C, 170/2 or 17D.
• Income and asset limits for determining if senior citizens qualify for exemption under
Clauses 41, 41 B or 41 C.
Topical Index Key: Distribution:
Exemptions Assessors
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informational Guideline Release (IGR)No. 1]-206
February 2011
OPTIONAL COST OF LIVING ADJUSTMENT
FOR
FISCAL YEAR 2012 EXEMPTIONS,
(G.L. c. 59, § 5, Clauses 17, 17C, 17C/z, 17D, 17E, 41, 41 B, 41 C and 4 1 D)
SUMMARY:
The Commissioner of Revenue has determined the cost of living adjustment to be used in
Fiscal Year 2012 by communities that have adopted certain local options. Those options allow
communities to increase annually the:
• Exemption amount granted to senior citizens and surviving spouses and
minors under Clauses 17, 17C, 17C'/2or 17D.
• Asset limits for determining if senior citizens and surviving spouses and
minors qualify for exemption under Clauses 17, 17C, 17C'/2or 17D.
• Income and asset limits for determining if senior citizens qualify for
exemption under C I auses 41, 41 B or 4 1 C.
The cost of living adjustment(COLA) is measured by the increase in the United States
Department of Labor, Bureau of Labor Statistics Consumer Price Index for Urban Consumers,
Boston (CP1-U) for the previous calendar year.
The cost of living adjustment for FY12 exemption purposes is 1.65%.
GUIDELINES:
1. ADJUSTED EXEMPTION AMOUNT FOR CLAUSE 17s
Communities have the option of increasing each year the amount of the exemption
granted to certain senior citizens and surviving spouses and minors under G.L. C. 59, � 5.
Clauses 17, 17C, 17CV2or 17D by any Verc�=e up to the COLA determined by the
Commissioner of Revenue. G.L. c. 59, § 5 provision added by St. 1995, c. 181.
BUREAU OF MUNICIPAL FINANCE LAW KATHLEEN COLLEARY, CHIEF
-2-
A. Local Adoption
I Acceptance
The COLA increases the exemption amount 2nly in those communities that
accept a G.L. c. 59, � 5 provision added by St. 1995, c. 181. Acceptance is by
vote of the community's legislative body, subject to charter. G.L. C. 4. § 4, The
attached or similar language may be used for the vote.
2. Annual Percentage Increase
The percentage by which the exemption amount is increased each year must also
be established by vote of the community's legislative body, subject to charter.
The annual increase cannot exceed the actual COLA for any year. There are
several ways in which a community may establish the annual increase including,
for example, the use of.
A percentage of the prior year's COLA (e.g., ne annual increase
will be 100%(or 75%, 50%, etc.) of the COLA.)
A capped increase(e.g., The annual increase will be 2.5%, or the
COLA, whichever is less).
Annual increases established in this manner apply automatically each year until a
new vote is taken establishing a different increase.
Alternatively,an annual vote may be taken to establish the specific percentage
increase for that particular year once the Commissioner of Revenue has
determined the actual COLA for the preceding year.
B. Annual Exemption Amount
The increases resulting from acceptance of this provision operate cumulatively. Each
year's exemption amount, after application of the voted percentage increase, becomes the
base to which the next year's increase applies.
Example
A community first adopts the local option provision for FYI I and votes to
increase the exemption annually by 100%of the COLA. In FYI 1,the
base $175 exemption increased by 0%and eligible taxpayers received an
exemption of$175 ($175 x 1-0). The FYI 2 exemption amount is
calculated by applying the FY12 COLA to $175. That results in a FY12
exemption amount of$178 ($175 x 1.0165).
-3-
If an optional additional exemption is granted under St. 1986, c. 73, § 4, the additional
amount is based on the adjusted exemption amount. In the example above, any optional
exemption granted for FYI 2 is based on $178, rather than $175.
C. State Reimbursements
Cities and towns will not receive additional state reimbursement for any increase in the
exemption amount granted under this provision.
11. ADJUSTED ASSET LIMIT FOR CLAUSE 17s
Communities have the option of automatically increasing each year the amount of assets
(whole estate) certain senior citizens and surviving spouses and minors may have and
qualify for an exemption under G.L. c. 59, § 5, Clause 17, 17C, 17Q1/2 or 17D by the
COLA determined by the Commissioner of Revenue, G.L. c. 59, § 5, Clause 17E.
A. Local Adolation
The COLA increases the asset limit on in those communities that have accepted G.L. c.
2-nily
59, § 5, Clause 17E. Acceptance is by vote of the community's legislative body, subject
to charter. G.L. c. 4. § 4. The attached or similar language may be used for the vote.
B. Annual Asset Limit
The asset limit increases resulting from adoption of this provision operate cumulatively.
Each year's new limit, as increased by the COLA, becomes the base'to which the next
year's COLA is applied.
Example
A community that operates under Clause 17D first adopts the local option
provision for FYI I. In FYI 1, the base asset limit of$40,000 was
increased by 0%and taxpayers qualified for the exemption with assets up
to $40,000 ($40,000 x 1.0). The FYI 2 asset limit is calculated by
applying the FY12 COLA to $40,000. That results in a FY12 asset limit
of$40,660 ($40,000 x 1.0 165).
-4-
C. State Reimbursements
Subject to appropriation, cities and towns operating under Clause 17 will be reimbursed
at the rate of$175 for each exemption granted. Reimbursements for cities and towns
operating under Clauses 17C, 17CV2and 17D, however, are fixed at the dollar amount
received in the last year Clause 17 was used and no adjustment will be made if additional
exemptions are granted as a result of accepting this provision.
111. ADJUSTED INCOME AND ASSET LIMITS FOR CLAUSE 41s
Communities have the option of automatically increasing each year the amount of the
income (gross receil2ts)and assets(whole estate) certain senior citizens may have to
qualify for an exemption under G.L. c. 59, � 5, Clause 41, 41 B and 41 C by the COLA
determined by the Commissioner of Revenue. G.L. c. 59, § 5, Clause 41 D.
This option does not adjust the income (gross receipts) seniors may have to qualify for an
exemption under G.L. c. 59, & 5. Clause 4 1 Q'/2. That income limit is tied w the income
limits under the state "circuit breaker" income tax credit,which are automatically
adjusted each year under another law. See Informational Guideline Release QGR) I I-
208, Clause 41CY2 Pro2Erty Tax ExemPtions for Seniors.
A. Local Adootion
The COLA increases the income and asset limits only in those communities that have
accepted G.L. c. 59, § 5, Clause 41 D. Acceptance is by vote of the community's
legislative body, subject to charter. G.L. c. 4, § 4. The attached or similar language may
be used for the vote.
B. Annual Income and Asset Limits
The income and asset limit increases resulting from adoption of this provision operate
cumulatively. Each year's new limit, as increased by the COLA, becomes the base to
which the next year's COLA is applied.
Examl2l
A community that operates under Clause 4 1 C Lirst adopts the local option
provision for FYI 1. In FYI 1, the base income limits of$13,000 for single
taxpayers.and $15,000 for married taxpayers were increased by 0%and
taxpayers qualified for the exemption with income of up to $13,000
($13,000 x 1.0) if single and $15,000 ($15,000 x 1-0) if married. The
FY[2 income limits are calculated by applying the FY 12 COLA to
$13,000 and $15,000. That results in FYI 2 income limits of$13,215
($13,000 x 1.0 165) and $15,248 ($15,000 x 1.0165).
-5-
In FYI 1, the base asset limits of$28,000 for single taxpayers and $30,000
for married taxpayers were increased by 0%and taxpayers qualified for
the exemption with assets of up to $28,000 ($28,000 x 1.0) if single and
$30,000 ($30,000 x 1.0) if married. The FYI 2 asset limits are calculated
by applying the FYI 2 COLA to$28,000 and $30,000. That results in
FY 12 asset limits of$28,462 ($28,000 x 1.0 165) and $30,495 ($30,000 x
1.0165).
If a community that uses Clause 41C votes to increase its income or asset limits under
that clause, the COLA will apply to the new higher limits. See IGR No. 02-209, Clause
41C Exemption Options. For example, a community votes to increase the gross receipts
limits for FYI 2 to the new maximum limits of$20,000 and $30,000 for single and
married taxpayers respectiv'ely. If Clause 41D is also in effect for FY12, the FY12
COLA of 1.65% would be applied to $20,000 and $30,000, which would result in FYI 2
income limits of$20,330 if single and $30,495 if married. Those amounts would then
become the base to which the FYI 3 COLA would be applied.
C. State Reimbursements
Subject to appropriation, cities and towns operating under Clause 41 will be reimbursed
at the rate of$500 for each exemption granted. Reimbursements for cities and towns
operating under Clauses 41 B and 4 1 C, however, are capped at the number of exemptions
granted the last year Clause 41 was used.
Examl
For FYI 0, a community operates under Clause 41 and grants 100
exemptions. It is reimbursed for 100 exemptions.
For FYI 1,the community adopts Clause 4 1 C and grants 75 exemptions.
It is reimbursed for 75 exemptions.
For FYI 2, the community adjusts its income and asset limits to the
maximums permitted by Clause 41C and grants 125 exemptions. It is
reimbursed for 100 exemptions, the number granted in the last year it
operated under Clause 4 1.