Tax Parcel Numbers – Limitations and Advantages

There has been some recent discussion about adding parcel numbers to the Home Mortgage Disclosure Act data sets (HMDA). This discusses some limitations and advantages of using tax parcel numbers outside the real estate tax system.

Typically tax parcel numbers are real estate tax system record identifiers that may also be used to relate tax parcel polygons and recorded documents to assessment and taxation records. They have evolved out of record based systems designed to track current and historical tax valuations, relate valuation to tax bills and manage tax credits and payments. As automated tax parcel mapping evolved the tax parcel number was a natural to include with the maps, providing a linkage to tax records.

Tax Parcel Number Limitations

One of the primary limitations of the tax parcel number is it often excludes tax exempt lands such as government managed land, churches, right of ways and public building sites. In some cases all of the exempt land is assigned the same code and in other cases no parcel number is assigned to exempt properties. There are exceptions of course and some jurisdictions do assign a tax parcel number to all parcels. Other idiosyncrasies with parcel numbers are

1) They may not be unique over time

2) They may change with annexations and tax district changes, and

3) Local formats and structure are highly variable.

Parcel Numbers Not Unique - Many local government have a practice of re-using parcel numbers when a parcel is split. If a portion of an existing parcel is conveyed the parent or remainder parcel often keeps the original tax parcel number that was originally assigned to the entire parcel. The geometry and legal description of the original parcel has changed with the conveyance or split but keeping the original parcel number allows many systems to create a linkage to the original parcel and be able to track the lineage. This practice is most common when the owner of the parent parcel did not change in the conveyance. Some property tax systems keep a parent-child table for tax numbers that explicitly stores the lineage of tax parcels, at least the lineage of tax parcel numbers, which can be used to trace the tax parcel history. If these tables exist and are used, then it is less of a problem to change the tax parcel number of the remainder parcel in a parcel split situation.

This practice of re-using parcel numbers is changing slowly with advances in automation of tax and assessment records and the migration to newer systems, especially systems linked to GIS. The practice of re-assigning tax parcel numbers is still fairly common throughout the U.S.

Affects of Annexation and Tax District Changes – Annexation changes a parcel’s tax district which can also change the primary real estate tax authority, for example if an unincorporated area is managed by the county, annexation to a city can transfer the primary real estate tax authority to the city. In some cases parcel numbers are changed with annexation. In most cases the history of the tax parcel number is tracked through parent-child tables.

Local Formatting – The variability of the structure and format of the local tax parcel number is legion. Spacing, punctuation, alphanumeric characters, length, rules and ordering are all subject to variation. Even in states with specified content individual county formats may have different spacing and punctuation in the tax parcel number. There are even counties where the tax number is formatted differently in the mapping software than in the tax assessor databases and this is surprisingly more common than expected. For the most part the software that manages the tax data dictates the format of the tax parcel number. There are many creative ways these software packages and local assessors embed location and parcel characteristics into the tax parcel number.

Tax Parcel Number Advantages

Even with all these caveats and variations locally assigned and managed tax parcel numbers are an important and essential data elements for many applications and downstream users of the data.

Identifies vacant land – Unlike site addresses tax parcel numbers provide a link to all taxable lands. Many jurisdictions do not assign site addresses to vacant land but is the land is taxable it will have a tax parcel number.

Connect to recorded and official documents – Many local governments, sometimes mandated by state law, recorded document numbers are included with the tax parcel number in the tax roll. These can include deeds, mortgages, mortgage releases, liens and many other documents such as permit records, inspections well and septic records. This can be very helpful when searching landownership even if the content of the linked documents may not be included in databases.

Identifies the entire parcel – The tax parcel number identifies and can be used to locate the entire parcel of land. Site addresses typically relate to just the structures on the land while the tax parcel identifier has information about the entire parcel including all structures in the tax parcel records connected by the tax parcel identifier.

Current and past records – The tax parcel identifier links to current and historical tax records, typically at least three years of past records. This makes it possible to see trends in tax bill payment history, trends in value and trends in use and tax rates.

As with any single data element, the tax parcel number is not a panacea, but it has enough value and application to be a useful addition to link to local tax and property records.