Sales Ratio Studies

All property sales reported on the Affidavit of Property Value are transmitted to the assessor's office of the county in which the sale occurred, and the DOR. Each Affidavit of Property Value is carefully examined to determine if it meets the requirements for validity as an arm's length transaction. After verification, the sale will be considered for use in a sales ratio study. Both DOR and the counties perform these studies at various times during the year.

The basic formula for a sales ratio is:

Full cash value ÷ Sale price = Sales ratio

Sales ratio studies are done in several forms:

  • By legal class of property use: residential, commercial, or agricultural
  • By market area or sub-area
  • By a combination of market area and legal class

If the studies disclose discrepancies with the Assessor's full cash values, or inequities between or within counties, the DOR may request that the Assessor perform field appraisals within the county, area, class, or classification of the properties where the discrepancies exist. Adjustments to the values may then be made to achieve equalization and uniformity. Also the DOR has been given the responsibility of enforcing equity in property valuation throughout the state. To this end, the DOR may issue what is called an "equalization order" every year. (The sales ratio study alone is not sufficient to determine the need for an equalization order, but may be used with other kinds of data to do so.) An equalization order may be appealed by the Assessor or any taxpayer affected by the order. Their appeal must be done at the State Board of Equalization level.