Time for another episode in our dramatic and compelling web series focusing on the MS-1 Report. Today we detail how to properly account for Pollution Control exemptions on Utility parcels. This topic probably applies to about three of you. If you are unsure whether it does apply in your case, you can review the RSA, contact your assessor, or follow the first step outlined below. If this doesn’t apply to you, then you can tune in next time.
Whether the exemption is recorded as a dollar amount or a percentage, Avitar Assessing allows you to itemize the “Water/Air Pollution Control” on its own line within the Edit Exemptions dialog box. These amounts are reported individually on the Exemption Report (grouped under Pollution Control when you sort by exemption type) and on Line 10 of the MS-1 (Water and Air Pollution Control Exemptions RSA 72:12-a). Which is good.
But here’s the problem: when Pollution Control exemptions are assigned to Utility parcels (i.e. Land Use is Utility-Electric, Utility-Gas, or Utility-Water) the DRA wants the valuations for those Utilities within the Utility Summary on Page 4 of the MS-1 to reflect the amount of the exemption. And currently it does not. For example, if you have a $100,000 Pollution Control exemption on a Utility parcel valued at $2,000,000 then the DRA wants $1,900,000 to appear in the MS-1 Utility Summary. And currently it’s showing $2,000,000. We will resolve this issue in a future update, but in the meantime you’ll have to finesse the method by which the exemption amounts are assigned in order to correctly report them on the MS-1.
Here’s how to do it:
- First determine if you have any parcels that fit this scenario. To do so generate an Exemption Report sorted by Exemption Type. Look for the group labeled “Pollution Control.” If you do not find any parcels with this exemption type, you’re done. If you do find parcels with this exemption type but the Land Use shown on the report is anything other than “UTILITY*”, you’re done as well. If you find you have one or more parcels with this combination of exemption and land use you need to keep going. So print the corresponding part of the Exemptions Report for reference and keep reading.
- For each Utility parcel, select the Features tab and press Edit. Add a new feature by typing “POLUTNCTRL” in the feature type column. When it asks you whether you wish to manually create a new feature answer Yes. For the Units and Rate enter “0” (i.e. zero). Finally, for the market valuation enter the corresponding amount of this parcel’s Pollution Control exemption as a negative number.
- Once you have added a negative feature amount that corresponds to the original Pollution Control exemption on each parcel, you need to remove the corresponding Pollution Control exemptions so you are not offsetting the parcel’s valuation by twice the exemption amount.
- After adding the negative features and removing the original exemptions, generate the Exemptions Report again and verify that the Pollution Control exemptions no longer appear for the parcels in question. Note that they should still appear for any Commercial/Industrial parcels.
- Generate the MS-1 Report and verify that the valuations for the corresponding parcels have decreased within the Utility Summary on Page 4 as well as on Line 3A on Page 2. Also verify that the amount listed on Line 10 on Page 2 has decreased by the combined amount of the Pollution Control exemptions you removed on Utility parcels.
- Finally, when you generate your final MS-1 report, add a note in the Additional Notes section which lists for the DRA the Utilities listed on Page 4 on which the valuations have been adjusted, along with the corresponding Pollution Control exemption amount for each.
As always, if you have any questions give us a call.