State considers banning $5 tax bills

Georgia House Bill 68 would prohibit the mailing of tax bills to property owners owing $5 or less. At first, the bill may sound like a reasonable, pro-taxpayer measure that would cut down on printing, postage, and compliance costs for small-dollar tax bills. However, as a tax official, I would say the text of this bill needs a solid mark-up by the House Ways & Means Committee before adoption.

First, state law already prohibits enforcement of executions (liens) against properties owing less than $5 after one year has elapsed since the execution (OCGA 48-3-21.1).

Second, as a practical matter, we have many small land lots in Decatur appraised by DeKalb County as being worth a couple hundred dollars. (Which is true in most other counties and cities in Georgia, too.)  Those result in tax bills in the $1 to $10 range. Some of these lots abut a larger parcel owned by the same person. Most of these owners pay the small-dollar taxes once they receive a bill. If we stop billing them, and if they know they can’t be held responsible for bills less than $5, they won’t pay it. Eventually, penalties and interest will automatically accrue on these accounts. Properties with bills in the $4+ range will eventually accrue enough interest to exceed $5. Once it exceeds $5, we would send them a bill and the taxpayer would ask us why there are penalties and interest on the bill when we never sent them a bill before. It wouldn’t be fair to send them their first bill after it had already become delinquent.

In other words, the HB 68 should clarify whether the $5 is strictly principal tax or whether it includes penalties and interest. The bill should also accommodate jurisdictions such as Decatur that do genuine split-billing in two installments. For example, if the state prohibits sending any bill under $5, that would mean that Decatur couldn’t send a $5 first installment bill in April and a $5 second installment bill in October on a single property that owes $10 for the year.

Any way you slice it, we aren’t talking about any real money. But as long as the bill is being considered it should be crafted clearly and cleanly.