Tuesday, July 22, 2014

Open letter to prospective tax sale bidders


Decatur’s annual tax sale is scheduled for August 5 at 10:00. As part of our delinquent collections processes, we are able to provide a list of properties scheduled for tax sale and balances owed upon request to interested parties.

However, we are unable to advise you on the quality or characteristics of the properties for sale, or potential financial or legal issues that may arise as a consequence of you bidding, purchasing, or losing a property at one of our annual tax sales. Tax sales conducted by the City of Decatur are “buyer beware” events.

Redemption procedures are governed by state law as follows:
§ 48-4-40.  Persons entitled to redeem land sold under tax execution; payment; time
Whenever any real property is sold under or by virtue of an execution issued for the collection of state, county, municipal, or school taxes or for special assessments, the defendant in fi. fa. or any person having any right, title, or interest in or lien upon such property may redeem the property from the sale by the payment of the redemption price or the amount required for redemption, as fixed and provided in Code Section 48-4-42: (1) At any time within 12 months from the date of the sale; and (2) At any time after the sale until the right to redeem is foreclosed by the giving of the notice provided for in Code Section 48-4-45…
§ 48-4-42.  Amount payable for redemption
The amount required to be paid for redemption of property from any sale for taxes as provided in this chapter, or the redemption price, shall with respect to any sale made after July 1, 2002, be the amount paid for the property at the tax sale, as shown by the recitals in the tax deed, plus any taxes paid on the property by the purchaser after the sale for taxes, plus any special assessments on the property, plus a premium of 20 percent of the amount for the first year or fraction of a year which has elapsed between the date of the sale and the date on which the redemption payment is made and 10 percent for each year or fraction of a year thereafter. If redemption is not made until more than 30 days after the notice provided for in Code Section 48-4-45 has been given, there shall be added to the redemption price the sheriff's cost in connection with serving the notice and the cost of publication of the notice, if any. All of the amounts required to be paid by this Code section shall be paid in lawful money of the United States to the purchaser at the tax sale or to the purchaser's successors.
If you have further questions about redemption or any other aspect of the tax sale process, I strongly encourage you to consult with an attorney experienced in such matters. You can access a list of local attorneys by going to www.gabar.org, entering “Decatur” under Member Directory, and clicking Search. There are many fine attorneys in Decatur who are knowledgeable about the applicable statutes.

Monday, July 21, 2014

A look behind the scenes in the lead up to a tax sale


The trend in Decatur over the last several years has been that about 95 to 97 percent of real property taxes are paid by the end of the 2nd installment grace period in early January. We collect the remaining 3 to 5 percent owed between then and early August.

Several steps occur between January and August to collect on the taxes that are owed for the prior tax year. Shortly after the grace period ends, my office sends out what we call “courtesy notices” to property owners with past due accounts. It’s considered a “courtesy” because sending these notices is not required by law. Of the 3 to 5 percent that is owed, about one-third of past due taxes are paid on the basis of these courtesy notices.

Around February we send an “Intent to FiFa,” to the property owner, which means that we intend to set a lien in 30 days if the taxes have not been paid by then. About another one-third of the past due accounts get paid after these “Intents” have been sent.

When we actually do set the liens and file them with the DeKalb County clerk of superior court, we send levy notices to the property owners. We call that “Stage One,” and accounts begin accumulating execution fees beyond the normal penalties and interest owed.

Later on in the spring, our delinquent collections partner, Government Tax Solutions, begins conducting title work on delinquent parcels. They determine who may have a security interest in the property apart from the owner, such as a mortgage company. Typically in June, “Stage Two” notices are sent to the property owners again and to those creditors.

In July, we advertise the remaining delinquent properties in the Champion as required by law. We also put up signs on the actual properties themselves. A final 10-day notice goes out to the property owner.

On the first Tuesday in August, we have a “tax sale.” We do this in City Hall—not on the courthouse steps like DeKalb County does. By this point, we normally have about 10 or fewer properties remaining, which are generally vacant properties and small tracts of land. The tax sale is an auction-style event at which the minimum bid to acquire a property is the amount of back taxes owed. The winning bidder has to pay off the back taxes in full with certified funds (cash or cashier’s check) by noon that day. The original owner of the property has a year to redeem the property (to buy it back) with a premium.

The time period between Stage One through the day of the tax sale itself is when Decatur’s Revenue Division collects the remaining one-third of the 3 to 5 percent of taxes that weren’t paid by the original deadline, bringing us up to a 99.9 percent collection rate on real estate property taxes for the prior year.

This year, we’re seeing the same basic pattern in delinquent volumes and the timing of payments that we saw in 2013 and 2012. This year’s tax sale is scheduled for Aug. 5 at 10:00 a.m.

Thursday, July 17, 2014

How Decatur's fees appear on 1st and 2nd installment tax bills


One of the questions in our new FAQs deserves elaboration since it causes confusion every year and it's hard to explain without visuals:

If Decatur only bills for sanitation and stormwater during the 1st installment tax billing, why are these fees showing up on my 2nd installment bill? Aren’t you double-charging me? The short answer is no, because the 2nd installment bill is always a re-statement of the entire bill for the year, including all taxes, fees, and payments made over the course of the year.

As an illustration, let's assume that your base property tax charges are $1,000 for the 1st installment, plus $312 in fees (residential sanitation and stormwater), and another $1,000 in taxes for the 2nd installment, ie $1,000 + $312 + $1,000 = $2,312 in total city taxes and fees for the year.  Here's how that would appear on your bills:


The line-by-line amounts during the second installment all appear to be "doubled," at first glance, but those are actually the full year's charges (1st + 2nd installments), which are partly cancelled out by what was already paid during the 1st installment.  The sanitation and stormwater charges are re-printed on your 2nd installment bill so that you know what the total year’s charges and payments have been.

Another way of looking at it would be that if the fees were being charged twice a year, the total bill would have been $2,624 ($1000 + $312 + $1000 + 312) rather than $2,312.

Wednesday, July 16, 2014

Decatur's tax office answers frequently asked questions

 
We've prepared answers to the most frequently asked questions we hear in the Revenue Division.  This information is also posted on the City's website at www.decaturga.com/taxfaq.  Please take a look and let us know if we left something out!
 
How do I check property taxes? You can pull City tax records, print a bill or receipt, or make a tax payment with a 2.2% plus 30¢ third-party processing fee online at www.decaturgatax.com.

When are taxes due?
We bill in two, unequal installments per year. Payment is due on June 1 and December 20.

How do I know if a property is inside Decatur’s city limits or is located in unincorporated DeKalb County?
There are thousands of properties with Decatur mailing addresses that are actually located outside of Decatur’s city limits in unincorporated DeKalb County. Properties in unincorporated DeKalb County do not receive services from the City of Decatur and are not subject to city taxes. About 99 percent of residences in Decatur’s city limits have a ZIP code of 30030, and about 90 percent of properties in Decatur have 3-digit street numbers. If you have a ZIP code other than 30030, or a 4-digit street number, there’s a fair chance that you’re not actually in the city. You can look at a map here, or search for the property on the DeKalb County tax commissioner’s website to confirm whether you are within city limits. If the property is in tax district 4, it’s in unincorporated DeKalb County. Tax district 92 is Decatur.

How long should it take for my tax payment to post? That will depend partly on where your payment was mailed. In general, even for in-person payments, please allow 7-10 business days before your payment is applied to your account. We honor postmarks, so don’t worry about additional interest accruing if you mailed your payment in on time.

Where is my refund? If an overpayment is made on your property, we refund the entity that made the last payment that resulted in the credit. For example, if you paid, then your mortgage company paid, we would refund the mortgage company. Issuing refunds may take three to four weeks after your original check cleared the bank before we mail out your refund check.

How do I appeal my property value? Through the DeKalb County tax assessors office. All properties in Decatur are assessed by the county. The city has no assessor, appraiser, influence, expertise, or authority over assessments. We receive values from the county and are bound by those values for tax purposes.

I appealed my taxes with DeKalb. Now what? We bill you using an 85% temporary value. Your city tax payment remains due while your appeal is being processed by DeKalb. Upon the conclusion of your appeal, you may end up owing us the remaining 15%. In other words, you could end up owing money even after winning an appeal.

Do I have homestead exemption?
Look at the exemptions column of your tax bill. You have the basic homestead exemption if a figure of $20,000 in the exemptions column on three rows of your bill. If you have all zeroes in the exemptions column, you do not have the basic homestead exemption.

If you’re not sure what age-based homestead exemptions you have, please call 404-370-4100 or visit City Hall for help. More information about homestead exemptions in Decatur can be found here.

To apply for the basic homestead exemption online, click here.

Will the second installment property tax bill be the same amount as the first installment? No.

How much will my next tax bill be? For a first installment tax bill, we will have your tax bill calculated by April 1. For a 2nd installment, we’ll know by October 20. We cannot provide any official numbers earlier than that because your taxable value or the millage rates could change.

Can I pay the full year’s taxes up front? No. We do not know how much your second installment tax bill will be each year until October 20.

Why did my tax bill go up? Individual circumstances will vary. Generally speaking, 1st installment tax bills are higher than 2nd installments because we bill for sanitation and stormwater fees during 1st installments only. Our millage rates have been fairly consistent over the last few years, so any other dramatic changes in your bill are probably due to a change in your assessed value from DeKalb County. Please check with DeKalb if you don’t understand why your assessed value has increased. To see an example of how we calculate bills, visit our general information page.

If Decatur only bills for sanitation and stormwater during the 1st installment, why are these fees showing up on my 2nd installment bill? Aren’t you double-charging me? No. The 2nd installment bill is always a re-statement of the entire bill for the year, including all taxes, fees, and payments made over the course of the year. The sanitation and stormwater charges are re-printed on your 2nd installment bill so that you know what the total year’s charges and payments have been, but you’re only being charged for these fees once per year.

Why are taxes in Decatur higher than DeKalb? The City of Decatur is known for high-quality services to its residents. DeKalb County property taxes for residents within the City of Decatur are lower than City taxes because the City provides more services to residents than the county does. Also, about 60 percent of your tax bill goes toward the city school system.

What if I never got a bill and my taxes are past due? We mail paper bills to every property owner twice a year. If we get mail returned, we research it and re-mail your bill either to the property address or alternate addresses that we find. We acknowledge that unusual circumstances may cause you not to receive a bill, but failure to receive a bill does not relieve you of your obligation to pay. Taxes are always due on June 1 and Dec. 20. If you haven’t received your paper bill, you can access it online at www.decaturgatax.com. We also offer a grace period with each billing. If taxes remain unpaid after the grace period we add 10 percent penalty and 1 percent interest per month. Ultimately, it is your responsibility as a property owner to ensure your taxes are paid.

What if I received a business personal property tax bill, but I’ve closed my business or sold the property?
Taxes must be paid for the full year regardless of any change in the residency of the taxpayer or disposition of the property that occurred after Jan. 1. The taxes cannot be pro-rated or waived even if your business has closed midway through the year.

Do you accept memo bills? No. We no longer accept payments with summary bills or statements that are created in-house by law firms or banks. All payments made by check must include the remittance coupon provided with the paper bill (or e-bill from decaturgatax.com) to ensure timely and accurate posting of your payment. Checks must include the property ID and the tax year for which the payment is being made.

I provided a new mailing address to your office. Why isn’t it showing on your website?
Please allow a few days after you’ve notified us of changes in ownership or mailing addresses to be updated. Also, please be aware that our ownership and mailing information is overridden each time we receive updated data from DeKalb County. DeKalb County maintains the official legal records including property recording, deeds, and tax digests. If you don’t notify the county of your updated information, the county’s old information will eventually override the information you’ve given us.

Where do I mail my tax payment? City of Decatur
P.O. Box 945650
Atlanta, GA 30394-5650

What types of payment do you accept?
You can pay with a check by mail or in person, cash in person, or by credit card online.

If you are paying off a tax lien or replacing a bounced check, we accept only cash or cashier’s check.

Why am I charged a processing fee to pay by credit card? The City uses a third party payment processor for credit card payments. This fee is charged by the processor. You can pay by check or cash with no extra charge.

What is the penalty if I pay late? A 10 percent penalty and 1 percent interest monthly are applied to any unpaid balances. Additional collection fees will apply if your account remains delinquent.

Who do I contact about my tax assessment, my appeal, my water bill, my landlord, my marriage license, or the public defender’s office?
DeKalb County at 404-371-2000.
 
 

Thursday, June 26, 2014

Kennesaw hikes taxes 700 percent on blighted properties


Kennesaw approved a “blight tax” in April aimed at properties that are uninhabitable, unsafe, or have repeated illegal activity. The logic behind the property tax increase is that it costs the city more to perform services such as public safety and code enforcement at blighted properties. The Marietta Daily Journal reports:
KENNESAW — No residents spoke either for or against a proposed blight tax by the city of Kennesaw at two public hearings, resulting in an unanimous approval of the program Monday night. The program establishes a procedure to identify blighted structures and sets an increased rate of property tax at seven times the normal millage rate. The increase would be applied to the next tax bill cycle, which begins Oct. 1 of each year. After the vote, City Manager Steve Kennedy said Kennesaw residents understand the city should have an additional tool to address unsightly concerns, even though no actual properties were pinpointed during the council discussions as fitting the description “blighted.”
It's an interesting idea although the potential tax rate seems very steep, and may open the door to legal challenges if the ordinance is ever enforced.  11 Alive reports that Kennesaw’s new ordinance is “patterned after similar ordinances in other local governments in Georgia.”…


Thursday, June 19, 2014

Part of HB 755 gets mixed reviews from tax officials


When a property is under appeal in Georgia, the property owner is generally billed for property taxes at 85 percent of the current year value. Last year, legislation was enacted that allowed the taxpayer to pay based on the 100 percent value if they preferred. House Bill 755, which was signed into law by Gov. Deal last month, includes further adjustments to the temporary value statute used for billing properties under appeal, with six different possible scenarios for determining the correct temporary value to use for billing based on the value of the property, whether or not improvements have been made to the property, and whether or not the property has been homesteaded.

Non-homestead properties valued at less than $2 million and homesteaded properties with no new improvements made to the property would pay 1) the 85 percent value or 2) the most recent final, settled value, whichever is less. 3) Homestead properties with new improvements would be billed at 85 percent. Non-homestead properties with proposed values greater than $2 million could pay 4) 85 percent of the proposed value, 5) 100 percent of the current year value, or 6) “the difference between the 85 percent tax bill based on the current year's valuation and the tax bill based on the valuation from the last year for which taxes were finally determined to be due on the property in conjunction with the amount of the tax bill based on valuation from the last year for which taxes were finally determined to be due on the property.”

When these different scenarios in the legislation were presented to the Georgia Association of Tax Officials at their annual conference in Athens last month, the response was unenthusiastic. During her presentation of legislative updates, Vicki Lambert, director of the Local Government Services Division (overseeing property and ad valorem taxation) of the Georgia Department of Revenue, said that the 6th possible calculation (referencing the difference between the values over two years) is too confusing to understand or explain.

Some county tax officials indicated that they would continue using 85 percent as their standard temporary value for most properties under appeal, but that they would include language on the bill or other printed materials describing the different possible values.

For the City of Decatur, we would base our bills on whatever value DeKalb County informs us is the temporary value—whether that is the 85 percent value or some other temporary amount dictated by law—and then adjust it by the same factor that we use to increase DeKalb’s 40 percent assessment to City’s 50 percent assessment (ie, 50 percent of the 85 percent value, or 50 percent of whichever value applies by law).

There are probably valid reasons for carving out all these different possible temporary values under the law, but it is a challenge to implement and communicate this clearly to taxpayers under appeal. Appealing your property value is already complicated enough without having multiple possible methods for calculating an accurate temporary value.

Tuesday, June 17, 2014

Decatur presents tips for maximizing revenues at national conference

Each attorney practicing law in Decatur is responsible for paying a $425 annual occupation tax to the City. Historically, our collection rate for this group has been low, and in 2012 we began taking steps to improve collections.

Over a one year period we were able to boost tax compliance for this group from 69 percent up to an 86 percent. We used performance measurements to identify the opportunity for growth and implemented process improvements to get there. After that experience we described our efforts in a case study submitted to the Alliance for Innovation, and the topic was selected for presentation during their Transforming Local Government 2014 conference in Denver, Colorado.

I had the pleasure of making the presentation in April along with communications chief Linda Harris, city manager Peggy Merriss, and revenue supervisor Shaun Shabazz. After presenting our experiences Linda conducted an interactive session called “The Dog Ate My Tax Bill” to help attendees brainstorm different ways to overcome nonpayment of taxes or other revenues.

It was a lot of fun, and as Peggy noted afterward, those who attended our session were very engaged. Thanks to her, Linda, Shaun, our city attorney Bryan Downs, and the folks at TLG including Brandi Allen who all helped make it a success!

Our case study doesn’t seem to be available yet on the conference archive, but here’s the PowerPoint I presented. This is useful information for local governments and businesses that are trying to collect on difficult accounts:


Thursday, June 12, 2014

5 days until key tax deadline passes


Although property tax payments were due in Decatur on June 2, the City has offered a grace period until June 16 during which no penalties or interest will be applied to unpaid accounts. That grace period expires on Monday.

A 10 percent penalty and 1 percent interest per month will be applied to amounts that remain unpaid after June 16.

Over the last few years we’ve observed that about 80 percent of taxes are paid by the initial deadline in early June, with another 15 percent of property owners taking advantage of the two-week grace period.

Tuesday, June 10, 2014

City shares tax info during annexation meeting

City staff [from left, Andrea Arnold, Russ Madison, and Shaun Shabazz] discuss taxes and homestead exemptions with Parkwood resident during recent Q&A session

School and City staff from all departments including Administrative Services and the Revenue Division discussed property taxes and homestead exemptions with residents from Parkwood neighborhood during a Jun. 5 meeting at City Hall.

Although Parkwood’s annexation will become effective July 1, 2014, residents in the area will receive their normal tax bill in the fall from DeKalb County and no tax bill from Decatur in 2014.  Property taxes are always based on the status of the property as of January 1, and as of that date the homes were still in unincorporated DeKalb.

Parkwood residents will receive their first tax bill from Decatur in April 2015 during our 1st installment 2015 billing.  We do not send individual bills to mortgage companies, so property owners should forward the bills to their lenders if paying taxes out of escrow.

I prepared a table showing how taxes may look over the next 18 months for these homeowners based on a few different property values in the neighborhood.  These estimates assume current millage rates, fees, steady property values, and a basic homestead exemption with the City and County.

100% County value
DeKalb 2014 bill
Decatur 1st install 2015 bill
Decatur 2nd install 2015 bill
DeKalb 2015 bill
$230,000
$3,000
$2,145
$1,835
$350
$350,000
$4,580
$3,160
$2,855
$550
$450,800
$5,890
$4,015
$3,705
$725

For a more precise estimate, tax calculators are available on this blog and at www.decaturga.com under “What’s New,” then “Annexation.”

Homestead exemptions are applied for separately with the County and the City.  Exemptions only have to be applied for once, and they renew automatically as long as there are no changes in ownership.  The Parkwood residents should apply for their exemption with the City prior to Mar. 15. 2015.  Our office will send a letter to the neighborhood explaining how Decatur’s exemptions work.

The last item that these new residents may need to know from our office is that any individuals with a home-based business would need to obtain a business license from the City pro-rated this year for $110, and $195 annually after that.

Thursday, June 5, 2014

Quick note about DeKalb’s assessment notices


The assessment notices that DeKalb County recently sent to property owners say “City Exemptions May Not be Included in this Estimate” at the bottom of the notice. This doesn’t mean that you don’t have a homestead exemption with the City of Decatur. What it means is that DeKalb does not factor in what City exemptions you have when preparing the estimate.

If you’re not sure whether you have your homestead exemption with the City, you can look at your 2014 1st installment tax bill. If you have the basic homestead exemption, your savings from that exemption will be printed just above the tear-off line of the remittance coupon. Also, look at the exemptions column of your tax bill. You have the basic homestead exemption if a figure of $20,000 appears in the exemptions column on three rows of your bill. If you have all zeroes in the exemptions column, you do not have the basic homestead exemption.

You can also call our office at 404-370-4100 to confirm what exemptions you have.

Monday, June 2, 2014

Property tax payment deadline today


Property tax payments for Decatur's first installment of 2014 are due today. We honor postmarks, so as long as you get your payment in the mail today, no penalties or interest will apply. Payments are also accepted by credit card online with a convenience fee charged by our third party payment processor.

Commercial sanitation payments are also due today in order to maintain service.