Tax office schedule announcement

City Hall including the tax office will be closed on January 1-2. If you need information about taxes during this time period, please use our website at www.decaturgatax.com. From there you can search, view, and pay property taxes with no convenience fee by electronic check, or by credit card with a convenience fee. Occupation taxes (business license fees) can also be paid from this website without a convenience fee.  Our office will re-open on Monday, January 5.  If you are attempting to pay taxes for the 2nd installment of 2014, please note that there is a payment grace period up through Jan. 8, 2015, during which time no penalties or interest will be added to past due accounts.

Your expiring business license

Business licenses in Decatur show an expiration date of Dec. 31, 2014. However, you have until January 31 to renew your license for 2015 without penalty. That being said, if you think you will need an unexpired business license (also known as an occupation tax certificate) during the month of January in order to obtain a business loan, business checking account, or to protect yourself in the event of legal claims by customers or employees, you may want to renew early.

Renewal notices/invoices were mailed in November. You can renew in person at 509 North McDonough Street; by mail to P.O. Box 220, Decatur, GA 30031; or online through www.decaturgatax.com after clicking on Occupation Tax on the left side of the screen.

Payment of the occupation tax may or may not be the only thing we need in order to renew your license.  Non-citizens need to file SAVE affidavits annually and businesses with over 10 employees need to file E-Verify numbers annually in order to renew their license.  Affidavits can be submitted with your paper renewal or can be uploaded if you're renewing online.

Reminder: lawyers' occupation taxes due by Dec. 31

Occupation taxes from attorneys practicing in Decatur are due by December 31 in accordance with City ordinance, Art. II, Sec. 22-26(b).  Our office will be open from 8:00 a.m. until 5:00 p.m. on New Year's Eve.

Payment options:
Attorneys are encouraged to pay this $425 tax online. Our website allows for payments by Visa, MasterCard, Discover, American Express, PayPal, PayPal Credit, or electronic check. No additional fees are charged for paying online—just the principal amount. There is no registration or login process. Just go to www.decaturgatax.com, click on “Occupational Tax” on the left side, select 2014 as the year, and enter your name as it appears on your bill. Once you’ve accessed your record, click "Renew," enter some basic information, and you’ll see your options to pay.  You can also use this website to access a copy of your occupation tax certificate.

If you prefer, payments can be made in person at City Hall 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:
Barnes v. City of Atlanta holds that local occupation taxes on attorneys 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).

Tax office to re-open on Dec. 29

City Hall including the Decatur Revenue Division will be closed on Thursday, December 25 and Friday, December 26.  If you need information about taxes during the holiday, please use our website at www.decaturgatax.com. From there you can search, view, and pay property taxes with no convenience fee by electronic check, or by credit card with a convenience fee. Occupation taxes (business license fees) can also be paid from this website without a convenience fee.

Tax payment grace period offered till Jan. 8

Decatur's due date for 2014 2nd installment real property taxes was today.  However, the City offers a payment grace period during which no penalties or interest apply to unpaid accounts.  The grace period this year will last until January 8, 2015.

Update on state university concessionaire tax exemptions

The Fulton County Daily Report reported last month that the state Board of Regents has signed a 65-year contract with Corvias, a student housing company, to provide almost 10,000 beds across nine state university campuses for an initial outlay of $517 million. The Daily Report quoted an attorney involved in the Board of Regents-Corvias deal as saying, “A lot of other university systems have been watching the Board of Regents' process, and we think it is going to be a model nationwide." The contract was awarded shortly after voters approved a referendum guaranteeing tax-exempt status for state university student parking and dormitories that are leased and managed by private companies.

Resolution passed to expand homestead exemptions

In a first step toward expanding two existing homestead exemptions and adding a new homestead exemption, the Decatur City Commission unanimously approved a resolution on Monday night to move the measure forward. The proposal stems from the City Commission’s desire to enact tax relief for residential property owners—particularly to senior residents on low or fixed incomes. The next step would be for the proposed exemption changes to be considered by the Georgia General Assembly to pass local legislation for an eventual referendum on the exemptions in 2015.

The proposal would increase the GH1 basic homestead exemption by exempting $25,000 in assessed value rather than the current $20,000 (which would save approximately $60 on resident homeowners’ tax bills annually assuming no change in property value or in the millage rates). Secondly, the GH2 (age 65) exemption amount of $1,000 would be increased to $10,000 (which would be a savings of an additional $100 per eligible taxpayer), and the addition of a GH3 exemption for homeowners over 62 with household income under $50,000 that would save about $175 per year.

Please remit by tomorrow if paying by e-check

If you are planning to pay your Decatur property tax with an electronic check on our website at www.decaturgatax.com, I encourage you to make your payment today or tomorrow.  E-checks can take three to five days to clear the bank, and our formal payment deadline this installment is Dec. 22, 2014.  Our website allows for e-check payments with zero convenience fees, and for credit card payments with convenience fees.  We also continue to accept payments by mail or in-person up through the payment due date.  If you have any issues with the website or the e-check option, please call 404-370-4100.

Cuts to federal tax credits for historic property rehabilitation under consideration

Stephanie Meeks, president and CEO of the National Trust for Historic Preservation, recently wrote an opinion piece highlighting the effectiveness of income tax credits for historic preservation of properties leading up to a national historic preservation conference in Savannah last month. Meeks also says that Congress is considering a repeal of the tax credit:

…Unfortunately, the federal historic tax credit has recently come under threat in Washington. As part of a broader proposal for comprehensive tax reform, the current chairman of the House of Representatives’ tax-writing committee has proposed a repeal of the federal credit. This would consign hundreds of worthy historic rehabilitation projects across the state to uncertain futures. It would harm the Georgia state credit — without the coupling impact of the federal and state tax credit programs, the effectiveness of Georgia’s investments would be vastly diminished. As the Senate Finance Committee considers tax reform proposals in the new Congress, we stand ready to work with Sen. Johnny Isakson — a member of the committee and soon to be Georgia’s senior senator — on legislative efforts to improve the tax credit without losing these vital benefits for communities.

These tax credits are going to be a focal point of discussion at our conference. We’re excited to hear from Macon Mayor Robert Reichert, who will discuss how, over the past two years, his city has had the most tax credit projects in the state of Georgia… 

For property tax purposes in Georgia, properties that have undergone rehabilitative work within set timeframes and improved the property value by set amounts can qualify for an assessment freeze of their property value for 8½ years. Interested property owners can apply for certification by the state Department of Natural Resources then apply for preferential assessment with the DeKalb County tax assessors office. This tax benefit is separate and additional to the state and federal income tax credits that Meeks described.

Federal government promises chip-enabled payment acceptance

Most credit cards in the U.S. have been replaced this year or will be replaced next year with cards that contain a special chip. Retailers are in the process of upgrading payment terminals to accept payments on these newer cards with entry of a PIN by the customer.  The private sector is generally ahead of government entities in adoption of the new chip-and-PIN (also known as EMV) technology, but the Obama administration has announced that federal agencies will begin accepting EMV payments soon.

Specifically, the White House says any new "retail payment card terminals at federal agency facilities" must be chip enabled beginning January 1, 2015.  I'm not sure what exactly this would include, and whether any federal facilities in the Atlanta area accept retail-style credit card payments. To the best of my knowledge, the Internal Revenue Service does not accept credit card payments for income taxes.  The IRS accepts checks, electronic checks, and (according to their website) they accept cash payments with exact change at their two Atlanta-area offices. Perhaps gift shops at national parks would be included.

No EMV directives have come from the governor's office for state agency payment acceptance, and there is no requirement yet for cities or counties in Georgia to accept payments using EMV-enabled terminals.  In October 2015, merchants including government entities that accept credit card payments will face greater liability in the event of credit card fraud committed as a result of credit card transactions made at terminals that aren't chip-and-PIN enabled.

Locally, Kroger has already installed the hardware necessary to accept EMV cards, but won't have the software ready to make it work until next year. Reportedly, Target, Walmart, Home Depot, and Walgreens will be able to accept chip and PIN payments in or before January 2015.

Doraville offers freeport exemption in 2015

Last month, voters in Doraville approved a freeport tax exemption for personal property (property which usually consists of business inventory). The measure passed was for a “level 1” exemption, meaning that there are still some types of business inventory that would remain taxable. A “level 2” freeport exemption would exempt more types of business inventory. Freeport exemptions for businesses work similarly to homestead exemptions for residents by exempting at least a portion of the property’s value. To some extent, freeport exemptions reduce the commercial share of the tax base relative to the residential share. Decatur does not provide a freeport exemption. 

From the AJC last month:

Doraville voters pass manufacturing tax breaks 

Doraville voters approved three tax breaks for businesses during last week’s election. The initiatives, known as freeport exemptions, are intended to attract and retain manufacturing and logistics industries, according to the city. Voters passed each of the ballot measures by about 2-to-1 margins. The exemptions on local ad valorem taxes apply to: 

• Inventory of goods in the process of being manufactured or produced, including raw materials and partly finished goods. 

• Finished goods produced in Georgia within the last 12 months 

• Finished goods stored in Georgia within the last 12 months and destined for shipment out of state

Residents in the city of Stone Mountain approved a similar tax break, making them the first two DeKalb County cities to do so. The county adopted a version of the freeport exemption in 1977.

Property tax office closed for Thanksgiving

The tax office will be closed on Thursday Nov. 27 and Friday Nov. 28 for Thanksgiving. If you need information about taxes during the holiday, please use our website at www.decaturgatax.com. From there you can search, view, and pay property taxes with no convenience fee by electronic check, or by credit card with a convenience fee. Occupation taxes (business license fees) can also be paid from this website without a convenience fee.

Reminder: business personal property taxes due Dec. 22

Business personal property taxes in Decatur are due in less than 30 days for 2014.  The taxes can be paid online at www.decaturgatax.com with an electronic check with zero convenience fees, or online by credit card with a convenience fee.  The taxes are based on returns filed by you or your agent with DeKalb County before April 1, 2014.  If you didn't file a value, DeKalb County determined a value for you.  Decatur takes that value, multiplies it by our 50 percent assessment ratio and our 2014 combined millage rate of 33.5 to arrive at your amount billed.  Revenues from the tax are distributed to the school system, the Downtown Development Authority, the city's capital improvement, bond, and general operating funds to provide quality services to the public.

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.

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.

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.

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.

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:

 



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.

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.

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).

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.

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."

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.

Business personal tax bills online for 2014

The 2014 bills for Decatur’s business personal taxes are now online. Your business can search, view and print your bill at www.decaturgatax.com. Credit card payments are accepted online with a 2.2 percent plus 30-cent third-party processing fee. You can pay by check or cash if you prefer. You will receive your paper bill next week.

These bills are generally based on the value of your business inventory such as merchandise, office or work equipment, and furniture. Over 400 local businesses are subject to this tax for 2014.  This is not a tax on buildings or land. Assessments are based on the value you reported to DeKalb County. If you didn’t report a value, DeKalb County determined the value for you. The deadline to file a return with DeKalb County stating your value was April 1, 2014. You can check with DeKalb for assessment policies going forward.

Taxes are owed to DeKalb County and to the City of Decatur separately. The 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, 2014. The taxes cannot be pro-rated or waived even if your business has closed. Decatur's payment deadline is normally December 20, but since that falls on a Saturday this year we will accept payments until December 22, 2014.

6 percent of Decatur businesses renewed online

From October 2013 through June 2014, 6 percent of businesses renewed their Decatur license by paying their occupation tax online. Of the 1,485 businesses that paid occupation taxes during that time period, 87 of them used our website at www.decaturgatax.com/businesslicense.

That is already a higher rate of web payments than we receive for property taxes (which is about 2 percent of payments made), even though there is more awareness of our property tax website since it has been available for four years. This fiscal year we anticipate a higher percentage of online business license renewals because of 1) increased marketing and awareness of the website, 2) the affidavit upload field on the website is no longer a required field, and 3) we are having some upgrades made to the website.

Attorneys will receive their annual occupation tax bill at the end of this month, and businesses will receive their license renewal bills later in November.

Tax office open on Columbus Day

While the post office, state agencies, and most banks will be closed, City Hall will be open for business as usual on Monday, October 13. City Schools of Decatur and DeKalb County offices will be open as well.

Joint study committee hearing on property taxes scheduled

The impact of property tax digests on local education funding in Georgia will be the subject of a public hearing at the State Capitol on October 23. State Sen. Jack Hill (R-Reidsville) and Rep. David Knight (R-Griffin) will co-chair the meeting and receive testimony from Ellen Mills at the state Department of Revenue along with officials from the Department of Audits and the Department of Education. The meeting will take place from 10:00 a.m. until noon in room 450 of the Capitol.

This will be the first of at least three public meetings of a joint study committee of five state senators and five state representatives. The committee was created with the passage of Senate Resolution 875 earlier this year and will be dissolved after their work is done before December 31. The committee will produce a report for review by the 2015 session of the Georgia General Assembly, and could form the basis of new legislative proposals.

Information for newer homeowners

If you are new in town, there are a few things that may helpful for you to know about home ownership in Decatur.

First, if your home is your principal residence, you are eligible to apply for a homestead exemption which reduces the amount you pay in property taxes. You must apply separately with Decatur and DeKalb. Applying for a homestead exemption with one office doesn’t grant you both exemptions. Please apply for the City homestead exemption at www.decaturga.com/homestead by March 15, 2015, in order to receive an exemption for 2015. If the home seller had homestead exemption, that remains valid for 2014 even though you’re a new owner.

Second, please be aware that we receive all official ownership and address records from DeKalb County. It is your responsibility to follow up to ensure that DeKalb has the correct record, which you can double-check at http://web.co.dekalb.ga.us/TaxCommissioner/. If you recently purchased your home, you must also notify Decatur of the change to ensure your tax bills are sent to the right party.

Third, Decatur sends bills for property taxes on April 1, due June 1, and October 20, due December 20. Please check the status of your city property taxes at www.decaturgatax.com, even if you were told that the taxes “were taken care of at closing.” Note that taxes may be due both to DeKalb and Decatur and we have different billing schedules.

For further information you may contact the DeKalb County assessors at 404-371-0841, the DeKalb tax commissioner at 404-298-4000, and the City Revenue Division at 404-370-4100.

Changes in filing requirements make online renewal easier for most businesses

For the past few years, businesses have been required to submit two immigration-related affidavits annually when they renewed their business license per state law. As I wrote about this summer, those requirements have been relaxed.  Now only certain businesses will be required to refile these affidavits under specific circumstances as follows:

In other words, businesses owned by U.S. citizens with 10 or fewer employees who have already filed their paperwork in past years are exempt from re-filing.  This is great news for businesses that want to renew their license online (http://decaturgatax.com/businesslicense) in Decatur because it means they will be able to do it without having to upload affidavits. The upload box on our renewal website is now an optional field. All we will need is the business's telephone number, quantity of employees, and your online payment. There are no convenience fees, surcharges, or markups.

New businesses still need to file both affidavits with their license application.

10 features at www.decaturgatax.com

If you haven't had the chance before, check out the different things you can do through our website at www.decaturgatax.com:

1. View six years of tax history for any property in Decatur
2. Make a tax payment online with any major credit card 
3. View or print a tax receipt or a tax bill for your records 
4. Submit a change of mailing address 
5. View three years of business license records for any local business 
6. Renew or re-print a business license 
7. View commercial sanitation accounts and make sanitation payments 
8. Search, view, and pay personal property (business inventory) taxes 
9. Apply for a basic homestead exemption
10. Give your feedback about the website through a survey 

 Additional features are coming soon!

How fees on tax bills work in Decatur

Apart from taxes themselves, the only fees that appear on Decatur's tax bills are for residential sanitation and stormwater (runoff/drainage). The fee amounts are adopted by the City Commission annually.

For 2014, the residential sanitation charge was $237.  The sanitation fluctuates a little each year but has generally been around $230 for the last several years.  Residential sanitation service is a "per household" charge.  For example, a duplex owner would be billed $474 rather than $237; a quadraplex would be billed $948, etc.

The standard stormwater charge for a single family dwelling is $75 annually.  The stormwater has been consistent for many years.  The stormwater assessment for non-single family dwellings, including commercial properties, is based on the amount of impervious surface at the property.  Properties without structures still have stormwater charges because of pavement, driveways, parking decks, or other impervious surfaces onsite.

Local businesses have a stormwater charge but no residential sanitation charges (although any business can sign up for commercial sanitation and recycling with the city). Tax-exempt entities such as government entities, schools, and churches have to pay a stormwater bill.

The City doesn't add fees to tax bills for street lamps, sidewalks, speed bumps, or sewer services.

Georgia expands its mortgage assistance program

 

The State of Georgia has expanded its mortgage assistance to certain homeowners on the basis of unemployment or other hardship through a program called "HomeSafe Georgia." The program began in 2011, but eligibility requirements were broadened earlier this year.  This information comes from the Department of Community Affairs which administers the program:

• Homeowners who became unemployed or underemployed in the last 36 months may qualify for assistance with their mortgage payment. NEW: Mortgage payment assistance is available for up to 24 months total, up from 18 months previously.
• NEW: Homeowners who can make their mortgage payments now, but have become delinquent, may qualify for reinstatement. The delinquency must be related to a military, medical, or death hardship that began in the most recent 36 months. A one-time payment of up to 12 mortgage payments is available for qualifying homeowners.
• NEW: Homeowners with a permanent reduction of income may qualify for up to $30,000 to reduce their mortgage payment to an affordable level. Income reduction due to the death of a spouse, permanent disability, or retirement due to unemployment may qualify homeowners for loan term modifications made by participating lenders. The lender must be participating in the HomeSafe Georgia program.

Property taxes including basic homestead exemptions in Decatur and DeKalb

To recap last week's post, a total year's property tax bill in Decatur in 2014 would be about 8 percent lower than for an equally valued property in DeKalb County if the property owner had no homestead exemptions (for example, commercial properties, rental properties, investment properties, second homes, etc).  When Decatur and DeKalb's bills within the City are added together, they would be about 14 percent higher than what the property would have been taxed in unincorporated DeKalb:

The differences are larger if the property owner resides on the property and has a basic homestead exemption with both the City and County.  The HOST credit on County bills is tricky to compute, but here are my estimates for 2014 factoring in owner occupancy:

Please note that these comparisons don't include fees for sanitation and stormwater drainage.  Tax scenarios for senior residents with additional homestead exemptions would vary significantly based on age, income, and in some cases the nature of the income (ie, retirement income versus non-retirement income), and jurisdiction.  There are additional differences across jurisdictions that could affect property insurance and flood insurance rates.

As always, this blog is not intended to give legal, political, financial, or tax advice, but to give information and answer questions generally about Decatur property tax issues. Please contact my office to discuss the specifics of your account; for tax advice please contact an independent tax professional.

Comparing property taxes in Decatur and unincorporated DeKalb

Following up on yesterday’s post about tax rate changes from 2013 to 2014, I wanted to broaden the comparison to add unincorporated DeKalb’s tax rates for 2014.

Property tax rates are currently lower in Decatur than in unincorporated DeKalb County. A property without homestead exemptions located in Decatur would have a tax bill 7.5 percent lower than a property with the identical value in DeKalb County (even when factoring in Decatur’s higher assessment ratio of 50 percent compared to the county’s ratio of 40 percent) in 2014. However, Decatur residents also pay property tax bills to DeKalb, which are based on a lower rate than what unincorporated residents pay. Once the city and county tax bills are added together, a Decatur property owner's total property tax liability for 2014 would be 13.8 percent higher than in unincorporated DeKalb for a property with the same value.

Here’s an illustration of estimated taxes based on millage rates by jurisdiction for 2014 depending on property values for a property without homestead exemptions:

Some confusion about true size of the difference between City and County tax bills comes in partly because some City residents assume that their County tax bill is what they would pay if they were located outside the City in unincorporated DeKalb. But it isn’t. For example (again assuming no homestead exemptions for simplicity’s sake), if a Decatur property owner was de-annexed, their City bill would go away the following year, but their County property tax bill would increase by about 80 percent the following year assuming steady millage rates and property values. Similarly, if an unincorporated property owner were annexed into Decatur, they would begin paying City property taxes the next year but their County tax bill would drop by about 80 percent the next year. But again, individual circumstances will always vary on the basis of values, appeal status, exemptions, and fees. And all the millage rates can change every year which would change the math.

Aggregate property tax rates fall in Decatur in 2014

The total, effective tax rate for property owners in Decatur is decreasing by 5.5 percent in 2014 compared to 2013 based on decreases in 1) the Decatur school millage rate, 2) DeKalb’s incorporated millage rate for Decatur, and 3) the State of Georgia millage rate. However, individual property owners’ actual tax bills will vary significantly based on their value assessed by DeKalb County. Bills will also vary on the basis of homestead exemptions and fees.

Here are the details:

1. The property tax millage rate for Decatur’s schools decreased from 20.9 in 2013 to 20.5 mills for 2014. That reduces the combined millage (all city tax rates plus the school rate) from 33.9 in 2013 to 33.5 mills for 2014. 
2. Property owners in Decatur also pay property tax to DeKalb County. (But the bill they pay to DeKalb is about 80 percent less than what property owners in unincorporated DeKalb pay to the County.) The county tax rate for City residents is determined by the DeKalb County Board of Commissioners. During their July 7 meeting, county commissioners approved a reduction in the county millage rate in Decatur from 12.03 mills in 2013 to 9.58 mills in 2014. 
3. The millage rate charged by the State of Georgia, which is collected through county bills, also fell from 0.15 in 2013 to 0.1 in 2014 as part of a five-year phase-out of state property taxes. 

As an example, if DeKalb determined the value for a non-homesteaded property of $200,000, it would have paid $3,390 in City property taxes and $974.40 in County taxes for a total property tax liability of $4,364.40 for 2013. The same property with the same value in 2014 would owe $3,350 in City taxes and $774.40 in County taxes for a total property tax liability of $4,124.40 for 2014.  Here are some more examples comparing properties with different values year-over-year:

7 cities in Georgia with assessments other than 40 percent

Following up on yesterday’s post, Georgia’s cities weren’t included in the original equalization of assessment ratios to 40 percent is 1968. The General Assembly revisited that in 1972, at which point 40 percent was established as the ratio for cities except for those that already had ratios larger than 40 percent. At the time, 12 such cities were grandfathered in with older, higher ratios.

As of 2013, according to Department of Revenue data, there are still at least seven cities remaining with an assessment ratio other than 40 percent:

• Gainesville (northeast Georgia)—100 percent 
• Buchanan (west Georgia)—100 percent 
• East Dublin (middle Georgia)—47 percent 
• Chatsworth (northwest Georgia)—75 percent 
• Americus (southwest Georgia)—50 percent 
• Dalton (northwest Georgia)—100 percent 
• Decatur—50 percent 

On its GeorgiaFacts.net website, the Georgia Department of Economic Development says, “The only realistic way to compare property taxes from different locations is to use 'effective tax rates' (tax rate multiplied by assessment ratio).” True. It would be impossible to estimate or compare property taxes across Georgia without at least knowing what the property value, assessment ratio, and millage rate.

How Georgia ended up with 40 percent property tax assessments

I've been somewhat surprised by the number of times I've been asked over the years why property tax assessments in Georgia are generally 40 percent.  To answer that question, we have to go way back...

According to Georgia State University’s Fiscal Research Center, property owners in Georgia reported the value of their own property for tax purposes throughout the 1800s. There were no property assessors. As you can imagine, this led to under-reporting of property values. Counties adopted millage rates as high as 60 or 70 mills and applied assessment ratios of varying amounts in order to balance their budgets.

The state began collecting its own share of property tax revenues in the 1900s by imposing a 5-mill rate, which was later reduced to one-quarter of a mill, and is currently being phased out altogether.  The state's share is collected by the counties and turned over to the state.

The problem with these two circumstances—varying assessment ratios coupled with a statewide property tax—was that they resulted in the state receiving taxes at non-uniform rates depending on the county where you owned property. This violated the legal principle of uniformity in property taxation. In 1965, property owner Alex McLennan sued on that basis in Fulton County superior court. The court agreed and ordered ratios to be equalized statewide.

At that point state officials basically had to pick a number. Dozens of Georgia counties already had assessments close to 40 percent on the books, so that was deemed the least disruptive approach. County ratios were set at 40 percent by state law in 1968.

While using a rate other than a full market or cash value of 100 percent may seem somewhat unusual, it’s actually pretty common in the United States. Only about half of states use a standard assessment ratio of 100 percent according to data from the Lincoln Institute of Land Policy. Some states have less than Georgia’s 40 percent, such as Arkansas’s 20 percent and Illinois’s 33 percent.  Several have more (even in excess of 100 percent) such as Maine which can range from 70 to 110 percent and Massachusetts which can range from 65 to 150 percent. Many states apply variable rates based on the class of the property being taxed.

More on city assessment ratios in Georgia later this week.

Tax office closed for Labor Day

Decatur City Hall, including the tax office, will be closed on Monday in observance of Labor Day. If you need immediate information while we’re closed, please go to decaturgatax.com. From there you can access all of our city property tax, stormwater, and sanitation accounts going back to 2009. Tax payments can also be made on that website with a convenience fee charged by our third-party payment processor.

At that website, you can also access occupation tax records (business licenses) and pay to renew your business license without any extra processing fees.

To apply for a basic homestead exemption online, go to www.decaturga.com/homestead. General tax information including millage rates and how bills are calculated are available at www.decaturga.com/taxes.

Please note that if you owe delinquent taxes, an additional 1 percent monthly interest charge will accrue on unpaid balances on September 2.

Book festival presentations for numbers people

When you go to the Decatur book festival this weekend, think about stopping by one of the sessions involving a topic that it’s hard to get enough of—money!

A couple events and stages caught my attention looking through this weekend’s schedule:

The business & economics track at the Marriott will include the authors of Factory Man, a book about an American family business that has to compete with cheaper Chinese manufacturers, the Wealth Choice profiling black millionaires, and What Stays in Vegas about the rise of big data and what it means for your privacy.

At the science track, Amir Alexander will discuss his nonfiction book Infinitesimal about a mathematical debate that affected the course of European history.

At the children’s stage, Jude Watson joins a “heists and heroics” panel. This year she published Loot, a robbery caper for young readers. See you there!

The problem with "memo bills"

I'm not sure if there's a formal definition of a "memo bill," but in my office we think of it as any payer-generated document showing an account number and an amount owed that is mailed in along with a payment. Typically, these are statements created in-house by businesses, law firms, or banks.

Judging from a May 2014 sample of payments we received, almost 15 percent of non-escrow tax payments are made by taxpayers who provide a memo bill rather than the remittance coupon we provided during billing.

Tax payments to Decatur are processed in a high-volume processing center at our bank. The processors are under instructions from my office to key in information provided on the check and the remittance coupons. The processors thrive with consistency--the more standardized the checks and coupons are, the more accurately they key in information, and the more seemlessly my office is able to import bank data to minimize posting delays or errors.

The memo bills we receive are formatted in a wide variety of irregular formats. Bank processors are not always able to readily identify property IDs on memo bills that might reference loan numbers and other extraneous data. Also, memo bills frequently lack critical but basic information such as which tax year the payment is intended for. Without a property ID and tax year, the payment cannot be applied to the correct account in an automated fashion--it kicks out as an exception that one of Decatur's revenue officers must research and post manually. This means that a significant amount of staff time (and wages) go toward reviewing memo bills to reconcile them to the appropriate account and tax installment.

Therefore, our policy and preference is to receive tax payments with the original remittance coupon we provide, or with a copy of the bill from our website (www.decaturgatax.com). Our residents do a fantastic job at including the coupons, but we need some help from certain companies that continue to generate memo bills. In the weeks and months to come, we may begin following up with letters to these memo bill creators stating that we are unable to continue accepting memo bills.

Local government millage rates in Georgia fluctuate in 2014

Like most years, some city and county property tax rates in Georgia are going up, some are holding steady, and some are decreasing.  There doesn’t seem to be a pattern.  Here’s a rundown of some of this year’s property tax changes in north Georgia and other major jurisdictions in the state:

Increases

Fulton County (17 percent)

Cobb County (1.5 percent)

Clayton County (2 percent)

Catoosa County (11 percent)

Walker County (15 percent)

Decreases

Cobb County School District

Polk County School Board

Cherokee County

Floyd County

Chatham County

Brookhaven

Steady

DeKalb County

Gwinnett County (no millage change but exceeds rollback rate)

Macon-Bibb County and the Bibb school board

Savannah

Dunwoody

Duluth

Suwanee

Decatur’s school millage rate is decreasing in 2014 while the City’s non-school millage rates are staying constant.

Officials square off over property tax increase

In 2013, the governor signed House Bill 604 into law, which prohibited the Fulton County board of commissioners from approving a property tax increase until 2015 at the earliest. The law says, “Any proceedings by the governing authority of Fulton County to make or fix a levy of ad valorem taxes for Fulton County at a millage rate which would exceed the roll-back rate shall be suspended until January 1, 2015.”

The Fulton County commission then voted to repeal the state law on the basis of their home rule authority under the state constitution, which says, “a county may, as an incident of its home rule power, amend or repeal the local acts applicable to its governing authority” (Sec. II, Par. 1) under certain conditions.

Last week, the county commission approved a 17 percent millage rate increase.

Former co-sponsors of House Bill 604 immediately sued Fulton County and are seeking an injunction to prevent the county tax commissioner from collecting taxes with the higher rate.  Lawyers for the lawmakers say that the home rule power cited by Fulton County is trumped by a 1951 amendment to the state constitution that specifically authorized the General Assembly to control Fulton County’s ad valorem taxation powers.

The tax increase has revived interest among some north Fulton County taxpayers to secede to create their own “Milton County.”

Lake Lanier homeowners seek property tax cap

Hall County property owners are asking state legislators to place a cap on the amount that property assessments can increase per year. If they drum up enough support, their proposal could change how assessments are handled statewide.  Access North Georgia reports:

Hall Co. group pushes for law to cap property taxes

GAINESVILLE - Owners of lake property in Hall County say they will not give up when it comes to placing a limit on how much they are charged each year for property taxes.

A group called "Georgia Tax Cap" has been gathering signatures on a online petition to present to lawmakers with the goal of having a new state law that would limit the amount property taxes could increase in a given year.

Group spokeswoman Berly West Baker said the effort was prompted by Hall County's reassessment of lake properties this year.

On average, property owners in the county saw an increase of about 39% in assessed value, but Baker said the bulk of those who faced increases were lake property owners. Plus, she contends most of the increases were much higher than the average - some as much as 300% higher…

But apparently, responses from North Georgia legislators are mixed. Caps have been controversial ever since California’s Proposition 13 which limited assessment increases to 2 percent annually. Lake property owners might have more luck contacting members of a state study committee created during the 2014 legislative session to evaluate property taxes and education funding, or by proposing a separate property tax cap study committee in 2015.

No properties sold at Decatur’s tax sale

Decatur conducted a tax sale yesterday for delinquent property taxes owed for 2013 and prior tax years. By the time of sale at 10:00 a.m., the only properties left were seven land lots of various size, quality, and accessibility. No buildings or homes—either occupied or vacant—were put up for auction. The number of delinquent properties by the time of our sale was consistent with the number auctioned over the past couple years.

Four potential bidders attended the sale at City Hall, but made no bids, meaning that the taxes for these lots are still owed and there will be no change of ownership at this time. Generally, buyers don’t want tiny land lots that cannot be easily built on (although neighboring property owners are sometimes interested). The minimum required bid is the amount required to pay off the back taxes and collection fees owed. If there had been any bids, the buyer would have had to pay the taxes, then we would have filed a tax deed on their behalf, and the original owner would have had a year to redeem the property from the tax sale buyer.

Contrary to popular belief, the seven properties do not automatically transfer to ownership by the City now. The properties remain on the tax rolls under the existing owners’ names, and the parcels can be included again in future county or city tax sales.

Though unpleasant, the deadline of a scheduled tax sale is the only thing that will ensure payment by certain property owners, so the tax sale is a crucial component in maintaining Decatur’s 99.9 percent real property tax collection rate.

Decatur adopts new millage rate for school system

Decatur’s school board voted to lower the school’s millage rate from 20.9 in 2013 to 20.5 in 2014 last month—a reduction of almost 2 percent. Tonight, the City Commission has formally approved the new rate. (The Commission is required by the City's charter to adopt the school board’s proposal).

Together with Decatur’s own 13 mill levy, the approval makes for a combined millage rate of 33.5 for 2014. The combined rate had been steady at 33.9 mills since 2011.

A mill represents one tax dollar per $1,000 of assessed property value, so a four-tenths reduction in the millage rate represents a 40¢ tax reduction per $1,000 of assessed value. In practical terms, this means homes in Decatur would see a reduction of their total property taxes for 2014 of $35 to $80 compared to 2013 if the property value didn't change since last year. Individual tax changes will vary based on assessed value. This chart shows a few examples (assuming the property value is the same in 2014 as it was in 2013):

	Example 1	Example 2	Example 3
100% property appraisal	$175,000	$320,000	$400,000
50% property assessment	$87,500	$160,000	$200,000
2014 city property tax bill	$2,931	$5,360	$6,700
2013 city property tax bill	$2,966	$5,424	$6,780
Year-over-year reduction of…	$35	$64	$80

Homeowners who are over the age of 80 and who make less than $40,000 will not see a change in their bills since they are not currently paying school taxes. Certain individuals over the age of 62 who have low incomes and low assessed values may also be paying little or no school taxes, and will likewise see little or no change in their bills.

In addition to real property, the millage rates also apply to "personal property," which are business inventory taxes, so some local businesses that have no change in their property value will see a slight savings.

The new millage rates will be factored into Decatur’s second installment property tax bills, which will be mailed Oct. 20 and due Dec. 22. Payments made during the first installment this spring are treated as credits against the total year’s taxes.

Stephens County assessor explains "burden shift"

The chief appraiser in a northeast Georgia county recently addressed the concept of "burden shift" brought about by homestead exemptions during a public meeting.  According to the Independent Mail, Christen Collier told Stephens County commissioners:

...Stephens County’s senior homestead exemption, approved by county voters, provides more of a break than the same exemption in other counties because of what Stephens voters approved.

“You have a senior homestead exemption in Banks County, you are going to save $450 off your tax bill,” Collier said. “In Franklin County, you are going to save $250 off your tax bill. In Stephens County, 65 years and over, you are going to save $1,040. That does not go away. It is called burden shift. It is shifting the burden.”

Collier said that burden shift falls onto those who do not have the same exemptions because the county has no other way to replace that revenue.

He used an example of a $100 meal to demonstrate that. If split equally, 10 people pay $10 each for that $100 meal. But with exemptions, some pay more than $10 and some pay less, Collier said. “Three people are going to be exempted from paying the meal,” Collier said. “Two people are going to get a 50 percent reduction, so those two people are going to pay $5. Three people are going to get a 25 percent reduction. They pay $7.50 each.”

That means, he said, the last $75 total must be split among three people which means three people pay $25 for the $10 meal, while three people pay nothing.

Collier said he is not against tax exemptions but wanted to point out their effects on property taxes.

It does sound like younger residents in Stephens County may be paying a larger share of their county's property taxes than their age peers in neighboring counties.  In theory, all local governments determine what services they are going to provide in the coming year, and then the adopt a millage rate necessary to raise the funds to cover the costs of the services.  Knowing what homestead exemptions their residents have, the governing authority would have to increase the overall millage beyond what it would have been were there no homestead exemptions.

However, I think local governments tend to make decisions about the millage rate based on a combination of what is expected politically and by what is financially feasible.  They don't necessarily apply rote, mathematical logic to the millage rate or automatically increase it each time homestead exemptions expand.  Some governments may be willing to "take a loss" by offering more exemptions, and some take a more agressive attitude by restricting exemptions as much as possible.  Also, a local government may be able to keep a millage rate steady even while offering more homestead exemptions if it identifies equivalent savings in the budget.

But Collier's basic point is sound.  Most homestead exemptions in Decatur were the result of approval by voters in a referendum, so voters should have the full picture in mind when deciding whether or not to add more exemptions.  This community has stated its commitment to helping seniors live affordably in their homes, so the possibility of burden creep isn't the only consideration here.

Brookhaven’s tax savings fact checked

Politifact rates Brookhaven’s claim that city residents there pay less property taxes than equivalently valued properties in unincorporated DeKalb as “half true.”

Brookhaven sent this mailer to taxpayers stating that owning a home in Brookhaven saves residents several hundred dollars a year in property taxes compared to owning a home in unincorporated DeKalb:
 

But Politifact found that Brookhaven didn’t take debt and stormwater charges into account, and that the city computed its examples with a dated estimate for the homestead option sales tax credit. Politifact says the corrected figures would actually reduce the relative savings to less than $100 a year for most homes.

I’ve been trying to convey accurate information to property taxpayers for several years, including contrasts between city and county taxes, often using visuals like Brookhaven did. In that time I’ve learned that it can be very tricky to make apples-to-apples comparisons between incorporated and unincorporated tax bills. I don’t get DeKalb’s digest from DeKalb—I get Decatur’s digest from DeKalb--so it’s challenging to pull properties from DeKalb’s website with the exact same value, equivalent exemptions, and identical attributes for determining fee assessments to draw comparisons with equivalent city parcels. DeKalb has shared a property tax calculator spreadsheet with us, and we have our own calculators as well, but that doesn’t always solve every question about potential tax liability.

Politifact’s headline says Brookhaven’s claims are “exaggerated.” Apparently so, but based on my experience, this looks like an honest mistake.

Changes to credit cards and acceptance methods on the horizon

Your credit cards will be changing soon to incorporate newer, fraud prevention features. EMV, or "chip and PIN" cards will begin replacing the magnetic stripe cards that American consumers use. Over time, this may begin to affect how payments are accepted at City facilities.  Here's a heads up from Fox Business:

The nationwide shift to EMV has begun.

EMV -- which stands for Europay, MasterCard and Visa -- is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions.

In the wake of numerous large-scale data breaches and increasing rates of counterfeit card fraud, U.S. card issuers are migrating to this new technology to protect consumers and reduce the costs of fraud.

"These new and improved cards are being deployed to improve payment security, making it more difficult for fraudsters to successfully counterfeit cards," says Julie Conroy, research director for retail banking at Aite Group, a financial industry research company. "It's an important step forward."

For merchants and financial institutions, the switch to EMV means adding new in-store technology and internal processing systems, and complying with new liability rules. For consumers, it means activating new cards and learning new payment processes.

Most of all, it means greater protection against fraud. The EMV "ship has sailed" in the U.S., according to Martin Ferenczi, president of Oberthur Technologies, the leading global EMV product and service provider. Consumers will receive their first chip-card soon, if they have not already.

"I predict that by the end of this year, every household will have at least one card with a chip," he says.

Filing requirements relaxed for businesses

In recent years, businesses renewing their business licenses in Georgia have been required to submit two affidavits with their renewal: 1) A SAVE affidavit affirming that the renewal applicant has legal status to work in the U.S., and 2) an E-Verify affidavit indicating whether or not the business is required to participate in the federal E-Verify program based on that business’s number of employees.

State Senate Bill 160 relaxed that standard. Now, as long as the business renewal applicant is a U.S. citizen who has already filed a valid SAVE affidavit previously, that applicant is not required to re-file a SAVE affidavit with their renewal. Legal permanent residents and qualified aliens will continue to be required to submit a SAVE affidavit with their renewal. Businesses that do not comply with this requirement will not receive a business license.

 Businesses with less than 10 employees that have already filed an E-Verify affidavit are no longer required to submit an E-Verify affidavit with their renewal either. Businesses with 10 or more employees are required to provide their E-Verify number annually with their renewal. Businesses that do not comply with this requirement will be reported to the State.

 New business applicants need to complete both affidavits.

When we send renewal notices to local businesses this fall, we plan to send invoices along with blank affidavits if our records show that your business still needs to file one or both affidavits. If our records indicate that you are exempt from filing based on the criteria above, we’ll just send you an invoice. If your business has experienced a change in ownership or has grown beyond 10 employees within the past year, please call us at 404-370-4100 as those changes will affect your filing requirements.

Funds for e-check/e-billing approved in FY14-15 budget

As part of the budget approved by the City Commission for FY14-15, the Revenue Division has been authorized to offer electronic check and electronic billing options for property taxes.

Decatur began displaying property tax information online and accepting online payments by credit card at www.decaturgatax.com in 2010. We are in preliminary conversations with our current online bill presentment vendor to expand features on that website. In addition to the current options of Mastercard, Visa, Discover, American Express, and Paypal, we would also be able to accept payments by e-check. The website would also provide a new e-billing option to "go paperless," by opting out of paper billings. Property owners who sign up for the service would receive an email when their bill is ready.

We hope to have these features in place during the 2nd installment 2014 property tax billing or 1st installment of 2015.

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.

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.