Exemptions and deductions in tax administration are intended to:

• A. Additions to value to raise revenue.
• B. Reductions to value that lower taxable value for eligible properties.
• C. Adjustments to tax rates.
• D. Changes to parcel boundaries.

Answer: (B)

Exemptions and deductions are ways to reduce the value that is subject to property tax. The process starts with the property's assessed value, and for eligible properties, exemptions can remove all or part of that value, while deductions subtract from the value to determine the taxable amount. The tax bill is then based on this lower taxable value, so exemptions and deductions directly lower what is taxed. This is used to provide relief to certain groups or uses, such as owner-occupied homes, seniors, veterans, or qualifying nonprofit or agricultural properties, aligning tax policy with social or economic goals. They aren’t about increasing value, changing the tax rate, or altering parcel boundaries, which are separate concepts and tools.