County delegates authority to to waive penalties and interest

The Catoosa County board of commissioners has delegated the authority to waive penalties and interest for unpaid property taxes to the Catoosa County tax commissioner. Previously each decision to approve waivers were coming before the county board. Now the tax commissioner will be able to make these approvals on his own. From the Rome News Tribune:

...Tax Commissioner Gary Autry had adjustments made to how his office will handle penalties and interest fees on property taxes.

County Attorney Skip Patty proposed a resolution giving Autry the power to waive those charges for individuals if he sees fit.

"This would give the tax commissioner the ability to waive only the penalties and interest if the party's failure to pay was not due to willful neglect," Patty said.

In other words, Autry can decided on a case-by-case basis to waive those extra fees if a person accrued the extra debt due to some sort of hardship.

Patty said other counties like nearby Whitfield have this practice, but that long-time tax commissioner Sandra Self didn't want that responsibility, and left those decisions up to the Board of Commissioners.

"This resolution would prevent the board from having to handle each individual case," Patty said. "The tax commissioner would need to make a notation on each case and that would then become public record."

The board unanimously approved the resolution.

In Decatur, the authority to waive penalties and interest rests with the city manager or her designee. Some late payers expect front-line staff to be able to waive their late fees; however, there needs to be some checks and balances in the system. Auditors usually don't like for employees who charge the fees to be the same ones who authorize a waiver of fees.

General Assembly OKs military waivers

The Georgia General Assembly approved two tax or administrative measures that are favorable to members of the military and their spouses during the final days of the legislative session.

HB 821, the “Military Spouses and Veterans Licensure Act” allows military spouses and servicemembers who have recently left the military to practice a state-licensed profession before a permanent license is issued. The professional licensing board for each profession is supposed to adopt rules before July 2017 to grant temporary or expedited licenses to these individuals. This should help military families earn income while their permanent license is pending. This affects such professions as psychologists, architects, and accountants.  The City of Decatur, like other local governments in Georgia, normally requires a state-licensed professional to provide proof of their state license before a local business license is issued.  Decatur would honor any temporary or expedited license issued to individuals in these circumstances.

HB 991, the “Returning Heroes Act,” is intended to forgive tax penalties on troops who are deployed while the taxes become past due.  Both bills must be signed by Governor Deal in order to become law.

Bill protects deployed troops from tax penalties

The Georgia General Assembly has passed a bill requiring property tax collectors to waive penalties and interest for military servicemembers if they pay the principal owed within 60 days of returning from a combat zone. House Bill 991 started out as a bill modifying the definition of the value of conservation-use property but was replaced by the House Ways & Means Committee with the waiver for deployed taxpayers. Known as the “Returning Heroes Act,” the bill heads to the governor’s desk next.

The bill would be financially beneficial to military personnel, effectively allowing an interest-free deferral of property taxes due while deployed. That being said, the bill could also lead to unintended consequences in some cases. For example, if a tax commissioner does not know that the reason for delinquency is military service, the tax commissioner could lien and levy the property before the taxpayer’s return. Although the penalties and interest could subsequently be waived, getting the lien cancelled would be annoying for the taxpayer and the tax commissioner. It would be in the deployed taxpayer’s best interest to communicate proactively either prior to deploying or from overseas to ensure that the tax commissioner is aware of his or her deployed status to prevent escalated collection action.

A second wrinkle is that the bill does not distinguish between deployed taxpayers’ homes of record versus investment properties. I am not sure that it is the intent of the General Assembly to grant a senior officer who may own or co-own a dozen investment properties to defer taxes during what could be a 400 day deployment. While the Returning Heroes Act is a great idea that should be approved, in hindsight it may have been better to specify that this waiver shall apply to homesteaded properties.

Six lawmakers want lower interest charges on delinquent taxes

Interest on past-due property taxes accrues at a rate of 1 percent per month. Six state legislators are sponsoring House Bill 265 which would reduce that rate to one-quarter of one percent per month, or 3 percent per year.

The bill is somewhat favorable to delinquent taxpayers, but it also runs the risk of reducing the incentive to pay taxes on time. In Decatur, we don’t count on interest charges being a significant source of revenue. To put it another way, the purpose of charging interest isn’t really about raising revenue. The purpose of charging interest on late payments—and this is true with accounts receivable in general, not just taxes—is to induce debtors to pay off before additional interest accrues. Charging interest is a technique to help collect the principle. Interest charges of less than one percent may not have the impact of a full percent.

But it’s probably all a moot point because the bill appears unlikely to pass this year. HB 265 hasn’t been marked up the Ways & Means Committee and hasn’t been scheduled for a floor vote. The Atlanta Journal-Constitution gives HB 265 only a 12 percent chance of passing this session.

5 days until key tax deadline passes

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

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

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

Two more days to pay without penalty

Second installment real property tax payments and personal property tax payments for 2013 were due by Dec. 20, 2013.  The City of Decatur has offered a grace period during which no penalties and interest have been charged for late payments, but that grace period ends in 48 hours. 

We honor postmarks, so as long as you mail in your payment no later than Wednesday, Jan. 8, no penalties or interest will be added to your account.

Thanks to the 95%+ residents and commercial property owners who have already remitted their payments!

Only 10 days left for business license payments

The deadline for local businesses to pay for their 2012 business license was Jan. 31. By law, businesses could still pay during a 90 day grace period following that deadline before penalties and interest are added.

Only 10 days of that grace period remain. Unpaid balances after Apr. 30 will be subject to a 10 percent penalty and 1 percent monthly interest.

Payments for occupational tax certificates may be made at City Hall or mailed to our office along with your invoice and notarized SAVE affidavit to:

City of Decatur
P.O. Box 220
Decatur, GA 30031

Failure to register for a renewal certificate will result in an automatic suspension of the business license.

Businesses no longer operating in the City of Decatur should notify us in writing so we can update our records.

Update on a Bank of America check...

To recap developments from yesterday, Bank of America created a property tax check on behalf of some of their Decatur borrowers on Dec. 17 that my office never received. After several phone calls between my office and Bank of America yesterday and today, I was able to open a formal “research request” with Bank of America’s tax department this morning.

One of their tax specialists informed me that he was submitting the request to higher levels within his department to research and reissue payment for the affected customers, with an estimated completion date of February 3. Bank of America should pay the penalties and interest, and the late payment would not affect their customers’ escrow accounts.

We do not maintain lists of individual property owners in Decatur who escrow with Bank of America. So if you received a delinquent notice from my office this week, and you escrow with Bank of America, please call us at 404-370-4100 so we can update our notes on your account and remove your home from our collections list.

My apologies to any resident who has been affected by this situation. Thank you for your patience while Bank of America works to resolve it for us.

Tax notices mailed

In an effort to notify property owners of any past due property tax balances from 2009, the Revenue Division of the City of Decatur mailed out 603 notices yesterday to owners who either made no or partial payments. Penalties and interest have been accruing on unpaid balances since our payment grace period ended on January 7.

We mailed out the original bills in two installments in April and October last year.  Why do some bills go unpaid?  Sometimes it involves an unwillingness or inability to pay, but in several instances the delinquency is due to a simple, temporary oversight.  Occasionally these bills are overlooked by new owners who purchased a property within the last several months who thought everything was “handled at closing.” We also run into owners who just changed their mailing address, but we sent the bill to the most recent address we had on file.

Periodically we run into issues with our residents’ mortgage companies. For example, we have received several calls today (and a note forwarded from Geoff Koski, publisher of Decatur News Online) from property owners who received a late notice from us, but who were told by Bank of America that their taxes have been paid.

We received a large check from Bank of America on Dec. 21 that covered 119 of their Decatur accounts, and we posted that payment in December to all the accounts that the bank listed. We did not send late notices to any customer whose account was paid by that Dec. 21 check.

However, we did not receive any other major checks from Bank of America in December or January for any of their additional customers. We have been communicating with Bank of America to find out what’s going on. No check has cleared our bank with the check number, check date, or check amount that Bank of America has provided.

A final note--if you’ve received a late notice in error, please accept my apology. Your payment may have arrived just after we printed out the bills. If you believe that your lender, our office, or a bank somewhere in between, has made an error, and that your taxes are actually paid, please call us immediately at 404-370-4100 so we can start to rectify the situation. To ensure the best service possible, please have a copy of your tax bill on hand when you call.

The end of grace?

Second installment property tax bills were due on December 21, so the final weeks of December were a busy time for Decatur’s taxpayers and tax office.

The good news for anybody who wasn’t able to make that original deadline is that we offered a two week grace period for payments during which no penalties or interest was charged.

However, the grace period ends tomorrow. Penalty and interest will be charged against unpaid amounts after Jan. 7.