Friday, November 21, 2014

Joint study committee on property tax impacts on school funding to meet Mon., Nov. 24


The state's joint legislative committee focusing on the impact of payments-in-lie-of-tax (PILOT) agreements and tax digests on school funding will meet for the second time on Monday, November 24 at 1:00 p.m. in room 450 (fourth floor) of the state capitol.  The agenda for the public meeting is to discuss recommendations for the committee's final report.  This may be the committee's final meeting of the year.

During the committee's first meeting in October, lawmakers identified the need for better tracking of PILOT agreements, more notification and transparency about PILOT arrangements to school boards by local development authorities and tax assessors offices, and possibly some refinements to state school funding formulas to ensure local school districts are made whole for forgone tax revenues from PILOT properties.

Thursday, November 20, 2014

Fran Millar pledges “to enact true property tax assessment reform”


In campaign ads in the DeKalb Neighbor leading up to the recent election, north DeKalb state senator Fran Millar highlighted his plans for the 2015 session of the Georgia General Assembly. He indicated that he will pass legislation to renew the property value freeze in DeKalb, and that he plans to “pass my legislation to enact true property tax assessment reform.”

During the 2014 session, Sen. Millar sponsored Senate Bill 293 which would have made changes to assessment calculations and to the appeal process. SB 293 passed the state senate but not the state house. Apparently, the initial drafts of the bill were written by property tax litigator Walter Hotz, who lamented the bill’s defeat in a blog post in June. Here’s Mr. Hotz’s explanation of the bill’s intent and his account of what happened to the bill in the House:
For this year’s legislative session, I was asked by a group of Georgia Senators to re-write the real property tax appeal laws for the state of Georgia for the purpose of providing safeguards and rights for Georgia real property owners.

The present laws were heavily weighted in favor of the tax assessors (each county in Georgia) and the Senators wanted to “level the playing field” for property owners. I was honored to have been selected for the task and, although it took more than 100 hours of my time, I was glad to do it. The present law had been drafted by the counties and their lobbyists. If you scoured deep you might find a little “right” for the property owner here and there in the present tax code but the drafters had made certain that whatever rights you had in the existing code, you had no way to enforce those rights – so the counties could simply ignore same with impunity – which many counties did – and there was nothing you could do – to say the code was well designed for the tax assessors would be a gross understatement.

So, the Georgia Senate wanted to do something about it. My suggested changes were put into Bill format by the Senate’s legislative counsel and the Bill was designated as SB 293. SB 293, as I drafted same, gave many rights to the property owner, most of which were commonsensical – rights that you would have thought certainly should have been given to the property owner – in fact, you would be appalled that such rights had not already been given to the property owner.

I appeared as the expert on tax appeal laws and testified before the Senate Finance committee and before the House Judiciary committee. The Bill and your rights were approved unanimously by the Senate Finance committee and received a two-thirds approval in the overall Senate – but then it went to the House Judiciary committee.

The Bill first went to the House Judiciary sub-committee. The House Judiciary sub-committee tore your rights apart and as to anything left, destroyed any enforcement provisions the Bill had given you. I was shocked when not only were they shredding your rights that the Senate wanted you to have but one member on the sub-committee wanted to add certain “penalties” to the property owner – I couldn’t believe she wanted to do so but she did – thankfully her suggested penalties against the taxpayer were not accepted. Then, when the Bill got to the full House Judiciary committee, the final death knell was struck…

Read the rest here.  The Association of County Commissioners of Georgia also plans to push for changes to property tax administration in 2015.

Monday, November 17, 2014

Decatur now accepts tax payments by e-check


In order to provide more options to taxpayers, Decatur now accepts property tax payments by electronic check (“e-check”). There are no extra fees to pay with an e-check—just the principal amount due.

How it works
Property owners can go to www.decaturgatax.com, access their record and click under “Add To Cart” to make a payment. A button will display to “proceed to secure checkout.” Payment options of Visa, MasterCard, Discover, American Express, Paypal, and e-check will be displayed. If e-check is selected, payment is made by entering a bank account and routing number. The company processing web payments on the city’s behalf is Paypal, but a Paypal account is not required to make payments by credit card or e-check.

E-checks clear in 3-5 days 
Property taxes for the second installment of 2014 are due by Dec. 22, 2014. Taxpayers should be aware that e-checks, like paper checks, generally take three to five days to clear the bank. It is not an immediate debit like online credit card transactions. Considering the clearing period, e-check payers are encouraged to pay at least five days prior to our formal payment deadline to help prevent any last-minute stress over whether your payment was received on time.

Why choose e-check?
Paying by e-check lets property owners save a stamp and avoid convenience fees for online credit card payments. Paying with an e-check through www.decaturgatax.com also offers several advantages compared to paying taxes as part of an online bill paying service through personal bank accounts. If you currently pay your taxes online through your personal bank account, we encourage you to consider switching to pay with an e-check directly through our website. At www.decaturgatax.com, you can access a full copy of your tax bill, while most major online banking services do not provide detailed bills. Secondly, using an online bill paying feature through your personal bank account may not allow you to include your property ID and tax year with your payment, which are the two essential pieces of information we need to post your payment to your account in a timely and accurate fashion. (Paying with an e-check through our website automatically provides the city with the property ID and tax year information.) Lastly, the e-check service we use is truly electronic, and no paper checks are generated or printed during the process, but with your online bill pay checks, we actually receive those checks as paper.

Web payment services
Decatur began accepting web-based credit card payments with a third-party convenience fee for property taxes in 2010. Adding free e-check acceptance has grown out of Decatur's ongoing commitment to provide more automated services to the community.  Businesses with commercial sanitation accounts will also be able to pay with e-checks in 2015.

Monday, November 10, 2014

Notes for Veterans Day


Partial exemption from property taxes
The City of Decatur provides a homestead exemption specific to veterans with disabilities in accordance with state law.  If applicants for the disabled veteran exemption provide us with a letter indicating 100 percent disability from the Department of Veterans Affairs and file an application card with our office, the exemption can save you up to $3,000 a year on your Decatur property tax bill.  The exemption is also available to unremarried surviving spouses.  Please note that this exemption is based on the disability status of veterans, and is separate from the exemption that disability-based exemption offered by DeKalb County.

Exemption from business license fees
Veterans discharged under honorable conditions from the U.S. military who have at least a 10 percent disability from wartime or a 25 percent service-connected disability from peacetime whose income is exempt from state taxation are also eligible for exemption from occupation taxes. In other words, you do not have to pay for a business license in Decatur if you meet those criteria. If you own a business in Decatur and qualify for this occupation tax exemption, please contact my office at 404-370-4100 so we can adjust your account.

Veterans Day in Decatur
A remembrance service honoring those who served in the military who are buried in the Decatur Cemetery will take place onsite tomorrow at 11 a.m.

Decatur City Hall will be open for business on November 11. Decatur schools, the post office, local banks, and DeKalb County offices will be closed.

Friday, November 7, 2014

Property tax bills online for 2014


Real estate property tax records in Decatur for the second installment of 2014 are online now. Paper bills were mailed out during the third week of October. If you have not received your paper statement yet, please go to www.decaturgatax.com to access a copy of your invoice, or call us at 404-370-4100. If you need it for reference, here’s a copy of the “Tax Notes” insert we enclosed with the tax bills explaining a few things you may want to know:

 

Thursday, November 6, 2014

Dorm tax exemption passes despite opposition from Athens


Tuesday’s referendum on guaranteeing property tax exemptions for privately-operated student housing and parking decks owned by the state university system passed overwhelmingly with 76 percent of electors voting yes.

The ballot measure passed by majorities in every county in Georgia except Athens-Clarke County where the University of Georgia is located. There, the number of opponents edged out supporters with 12,683 voting no and 12,120 voting yes. That result is somewhat unsurprising considering the long history of frustrations in Athens-Clarke over the amount of non-taxable property in the county. The university system owns so much tax-exempt property there that many non-exempt property owners feel unfairly burdened. There is also some skepticism there over what is perceived as a sweetheart deal: before the election the Athens Banner-Herald called the proposal, “Basically a tax break for private developers who build student housing and parking facilities.” On the flip side, if UGA weren’t in Athens, there wouldn’t be as many taxable businesses and homes there either.  Supporters also argue that the university system has too much debt to finance new developments on its own if the measure hadn't passed.

Dalton State College already has a plan in the works to take advantage of the referendum’s passage for a new student housing development. The Dalton Daily Citizen reports that there are developments at nine campuses planned statewide now that the referendum has passed.

Wednesday, November 5, 2014

Georgia’s business tax climate worsens slightly


Georgia has fallen to 36th in a ranking of state tax climates according an annual study by the Tax Foundation. The ranking considers simplicity of tax structures as well as tax rates. The think tank had rated Georgia as 34th in 2012 and 35th last year.

The Tax Foundation also compares states by tax types, rating Georgia as 30th for property taxes, 42nd for individual income taxes, 17th for sales taxes, 8th for corporate taxes, and 36th for unemployment insurance taxes.

Relative to our neighbors, Georgia fares a little better than South Carolina which ranked 37th overall, but worse than Tennessee at #15, Alabama at #28, and Florida at #5.

The rankings could renew interest at the state capitol in reforming Georgia’s tax code in 2015.

Tuesday, November 4, 2014

Attorneys billed for occupation taxes


Lawyer invoicing:
Decatur sent bills to local attorneys late last week for occupational taxes owed for 2014. The bills are based on existing city records and state bar directory records. The annual bill is for $400 plus a $25 administration fee. Revenues are used to provide quality services to the public. If you no longer practice law in the City, please let us know. You may also check the state bar directory at gabar.org and update their address record for you if necessary.

Payment options:
Attorneys are encouraged to pay this tax online. Our website allows for payments by Visa, MasterCard, Discover, American Express, or PayPal. No additional fees are charged for paying online—just the $425 amount. There is no registration process, no login or user name, no passwords, and no PINs. Just go to www.decaturgatax.com, click on “Occupation Tax” on the upper left, select 2014 as the year, and enter your name as it appears on your bill. Once you’ve accessed your record, you’ll see your option to pay. Payment is due by Dec. 31, 2014.

If you prefer, payments can be made in person at 509 N. McDonough St. by cash, check, or credit card; or by mail to City of Decatur, PO Box 220, 30031. If paying by mail, please enclose the bottom portion of your invoice so we can apply your payment to the right record.

Authority to tax:
Some attorneys practicing law in Decatur have questioned the City’s occupation tax on the basis of Barnes v. City of Atlanta. Barnes holds that such taxes must be revenue measures only, not regulatory in nature. Decatur’s occupation tax ordinance expressly states that the occupation tax is levied “for revenue purposes only and is not for regulatory purposes” (Sec. 22-15).

Monday, November 3, 2014

State rep says DeKalb tax freeze is his top priority for 2015


Rep. Mike Jacobs (R-Brookhaven) says his top priority in 2015 will be making the property tax assessment freeze in DeKalb County available to homeowners permanently. Rep. Jacobs is running unopposed for reelection to the Georgia House of Representatives.

The League of Women Voters of Georgia asked candidates for office, “If elected, what would be your top three priorities and how would you work to achieve results?” Jacobs answered:
First, I helped pass a ten-year property tax assessment freeze in DeKalb County which will expire in 2016. I sponsored legislation this year to make this assessment freeze a permanent measure. The legislation passed the State House, but failed to gain sufficient support from the DeKalb members of the State Senate. I intend to try again in the 2015 legislative session…
The freeze does not affect City of Decatur property tax bills, City revenues, or Decatur school system revenues.  But the freeze does affect the DeKalb County bill that Decatur property owners receive and their overall property tax liability. The amount of savings from the freeze varies based on how much the property value has changed since it was frozen. Technically, the freeze doesn’t change assessed values (which must be calculated according to standard appraisal methodology per state law) but rather offsets increases in property values by reducing DeKalb taxes billed.

Wednesday, October 29, 2014

Two tax measures on Georgia’s ballot


Tuesday’s election will include two ballot questions related to taxes in Georgia.

The first is a proposed constitutional amendment that would limit Georgia’s top marginal income tax rate to 6 percent. The tax rate has been steady at 6 percent since 1969 by statute, but this change would enshrine the rate in the state constitution. Supporters say the amendment would help attract businesses to Georgia by giving them additional confidence that the tax rate would not increase, while opponents say the cap would restrict Georgia’s ability to increase revenues if needed. The wording of the question is “Shall the Constitution of Georgia be amended to prohibit the General Assembly from increasing the maximum state income tax rate?”

The second tax question is a statewide referendum that would clarify that state university-owned student housing and parking decks leased and managed by private contractors would always retain tax-exempt status. Government property is almost always tax-exempt. The question reads, “Shall property owned by the University System of Georgia and utilized by providers of college and university student housing and other facilities continue to be exempt from taxation to keep costs affordable?” The Georgia Policy and Budget Institute’s Wesley Tharpe laid out the pros and cons of this proposal to The Marietta Daily Journal, saying:
"(The proposal will) allow Regents to reduce the nearly $4 billion in debt that it has accrued over time as a result of what some have described as overbuilding,” Tharpe said. “This could help free up the university to sell additional bonds at a better rate for other projects in the future. “The potential downside is that there are no restrictions explicitly spelled out in the legislation as to how much private companies will be able to charge for rent,” he continued. “The university system claims that it will still have the ability to regulate and limit student housing costs over time, but it is still somewhat of an open question since those rules are not laid out in the proposal."

Monday, October 27, 2014

State lawmakers question officials on development authority tax breaks


Concerned about the impact on school funding, a joint study committee of state legislators convened Thursday for a hearing on the procedures, reporting, and effects of special property tax arrangements with Georgia businesses.

Many development authorities throughout the state have tax-exempt status if their charters establish them as the equivalent of government entities. When those development authorities buy properties, those properties maintain tax-exempt status even when the development authority enters leasehold agreements with private entities such as manufacturing plants. These payment-in-lieu-of-tax (PILOT) agreements are usually designed to provide for economic development by incentivizing companies to stay, relocate to, or expand in Georgia. Generally, as bonds are paid off, the amount of the exemption provided to the company subsides over time until the property is eventually 100 percent taxable again.

One of the factors behind the creation of the joint study committee was a significant error in how one PILOT was reported to the state. Troup County made arrangements with the local Kia Motors plant to accept payments in lieu of taxes several years ago. Due to a mistake in how Kia’s property value was classified in the county’s consolidated digest sheets, the state paid less funds to the Troup County school system than it otherwise would have for 2012. (Apparently, mis-categorizing the PILOT value as taxable rather than as exempt gave the appearance of Troup having a larger overall digest value thereby reducing the state’s calculation of the county’s effective millage rate and the amount of money granted to them in Equalization funding, which is designed to benefit poor or rural counties with relatively smaller tax bases.) During the 2014 legislative session, lawmakers agreed to pay $1.7 million to the Troup County board of education based on a recalculation factoring in the proper PILOT values.

The downstream effects of such PILOT arrangements and calculations on school funding was of particular concern during the hearing to committee member Sen. Lindsey Tippins (R-Marietta), who emphasized the need for standardization to ensure that schools are included in the abatement process and that they are “made whole” for the foregone revenue.

A PILOT deal can have a compounded effect on school funding because it doesn’t just reduce the school district’s local property tax revenues, but it affects some of the state’s funding formulas for money granted to the schools. According to state deputy school superintendent Scott Austensen who testified before the committee, PILOTs don’t affect Quality Basic Education (QBE) funding because they are treated by the state as local exemptions, but PILOTs do affect Local Fair Share and Equalization funding.

But assuming that PILOT property values are calculated and reported correctly, PILOTs may actually help school districts with certain types of state funding. Rep. Mike Dudgeon (R-Johns Creek), vice chairman of the House education committee, noted during the hearing that a local PILOT would increase the amount of money paid out by the state in Equalization funding, and Austensen agreed. Dudgeon proposed assigning a special code on consolidated digest sheets for PILOT properties so that those values would be easier for state and school officials to monitor.

Sen. Hill called upon Capitol staffers to synthesize recommendations made during the meeting for discussion at a future hearing which has yet to be scheduled, but needs to take place before the end of the year according to the resolution that created the committee.