What January 1 means for local taxes

January 1 is a significant date for property taxes and business licenses. Here are a few things that homeowners and business owners should keep in mind for the new year.

Property owners 

Assessments. Property assessments for 2017 conducted by DeKalb County will be based on the status of the property as of January 1. For example, new developments and improvements made prior to January 1 will be factored into 2017 assessments by DeKalb, but improvements made after January 1 would not. If something about your property has changed since last year, such as a demolition, you should file a return with the DeKalb County assessors office between now and April 1 to ensure that the assessors have current information.

Homestead exemptions. Qualifying for age-based homestead exemptions for your property taxes depends on the age of the homeowner as of January 1. If you turned 62, 65, 70, or 80 prior to January 1, you may have become eligible for one or more homestead exemptions offered by Decatur. Homestead exemptions can be applied for with the city between now and March 15, 2017, to ensure that any new exemptions on your account appear on your 1st installment tax bill which will be mailed out by April 1. Call 404-370-4100 for details.  You should also check with DeKalb to determine whether you have become eligible for any additional exemptions with their office.

Billing. Property owners should note what tax officials mean by “the first-of-the-year owner,” or the “January 1 owner.” DeKalb County records the owner as of January 1 and the current owner if ownership changes later in the year. Many times, we are questioned about why a bill or a delinquent notice was sent to the January 1 owner rather than the current owner. Generally speaking, Decatur attempts to notify the current owner of bills that are owed. But there can be delays in reflecting current ownership information, and the January 1 owner may be considered to be responsible for the taxes that year depending on the terms at closing, or at least is responsible for notifying the current owner of any bills that the January 1 owner received for the property. 

Business owners

Although business license payments for 2017 can be made until January 31, please note that 2016 business license certificates in Decatur have expired. Call the Decatur business license office at 678-553-6743 for renewal options.

If your business has more than 10 employees as of January 1, you will need to let the Decatur business license office know your E-Verify number if you haven't already done so. State law says that the E-Verify requirement is based on the number of employees a business had as of January 1.

If you owned a business that closed in 2016 or moved out of Decatur or DeKalb, you should notify the DeKalb County assessors office at 404-371-0841 to ensure that you do not receive a business inventory tax assessment notice and tax bills from DeKalb and Decatur in 2017. If your business is open for the beginning of 2017 you will receive an assessment and tax bill for 2017 even if your business closes or moves later this year.

DeKalb deadline to appeal value is July 18

Property owners in DeKalb County, Georgia, received a notice early last month showing their property assessment for 2016. Owners who intend to appeal the assessment must appeal within 45 days, which will end on July 18.  The deadline applies to county residents and residents of cities in DeKalb, including Decatur.

If you did not receive or lost your notice, I recommend that you go to DeKalb’s website. From http://taxassessor.dekalbcountyga.gov:81/PropertyAppraisal/index.html, click on “Real Estate Data,” search for your property, and once your record comes up, and click under the “Assessment Notice” area to see a PDF of your 2016 assessment notice.

An owner whose property has been overvalued and who has evidence to support an appeal, such as lower values of comparable properties, may want to consider appealing their assessment. DeKalb’s website allows for electronic filing of appeals.

To reach the DeKalb tax assessor/property appraisal department, call 404-371-0841. For filing an appeal in person, go to 1300 Commerce Drive in the Maloof Annex. They will have a high volume of calls and foot traffic on Monday.

State agencies not immune in property tax lawsuit

Last December, property owners on Sapelo Island sued McIntosh County and the State of Georgia for discrimination and neglect. The lawsuit is based largely on the allegation that the Geechee property owners are paying county property taxes based on soaring assessments without receiving services in exchange. The State of Georgia requested that the state be dropped from the lawsuit, partly on grounds of sovereign immunity. A federal judge recently ruled that most of Georgia's agencies, including the Department of Natural Resources, are not immune from being sued.

The news comes from the Associated Press:

Key Georgia Agencies Not Immune in Slave Descendant Lawsuit

By Russ Bynum

Associated Press SAVANNAH, Ga. — Jun 22, 2016, 5:18 PM ET

A federal judge ruled that key Georgia agencies are not immune from a lawsuit that claims one of the last Gullah-Geechee communities of slave descendants on the Southeast coast is being eroded by discrimination and neglect.

Residents and landowners from the tiny Hogg Hummock community on remote Sapelo Island sued the state and McIntosh County last December in U.S. District Court. The lawsuit says the enclave of about 50 black residents is shrinking rapidly as landowners are pressured to sell because they pay high property taxes yet receive few basic services...

Reachable only by boat from the mainland, the largely undeveloped barrier island about 60 miles south of Savannah has no schools, police, fire department or trash collection.

Attorneys for the state asked the judge to dismiss the lawsuit. They argued the Department of Natural Resources, which manages most of Sapelo Island, and other agencies are immune under the 11th Amendment, which grants states broad protection from lawsuits in federal court.

In a ruling last Friday, Judge Lisa Godbey Wood in Brunswick granted immunity to just one agency — the Sapelo Island Heritage Authority — and ordered that it be dropped from the lawsuit. Other defendants including the Department of Natural Resources, Gov. Nathan Deal, McIntosh County, county Sheriff Stephen Jessup and the county Board of Tax Assessors still face civil claims.

However, the judge declared both the sheriff and the tax assessors immune from monetary damages in the case.

Wood is still considering other arguments for dismissal that are not related to immunity.

DeKalb assessment notices to be sent June 3

DeKalb County assesses the values of all properties in the county and its cities. Per state law, counties are required to mail out assessment notices annually. DeKalb will mail out their assessment notices on June 3. The notice will advise you of your property value for 2016. I encourage all property owners to pay extremely close attention to the figures and deadlines on the notice. The 2016 value will be the basis of your DeKalb County property tax bill in the fall and, for Decatur property owners, your 2nd installment tax bill for 2016. 

Here are a few tips for reading your assessment notice. Assuming that the county formats it like previous years, your 100 percent value for 2016 will appear toward the center of the notice. That’s what you want to look at first. If the value doesn’t seem right to you, think about whether you could sell your property for that amount. If you conclude that the assessment does not accurately reflect market value, you may consider appealing. You will see the appeal deadline printed toward the top of the bill, which is 45 days from the date of the notice. (It will probably say July 18.) DeKalb warns, “If you do not file an appeal by this date, your right to file an appeal will be lost. Late appeals will not be processed.” If you don’t receive a paper notice for each of your properties, you should be able to access notices on DeKalb’s property appraisal website.

If you have questions about your assessment or the appeal process, call DeKalb County. Toward the middle of the notice, right above the “grid” area, you should see the names and phone numbers of staff contacts who can assist you with questions about your assessment. Your best bet is to call the staff contacts on your notice because they have the expertise for the location and the classification of your property. (If you’re going in person, note that the assessors have moved out of the their old location in the Callaway Building to their new location at the Maloof Building, 1300 Commerce Drive in Decatur, where the water department used to be.) Please keep in mind that the City of Decatur is unable to answer questions about the values DeKalb determined.

At the bottom of the notice you’ll see estimates for property taxes for the year. However, the estimates are based on last year’s millage rates because this year’s have not been approved yet. You will also see a disclaimer that “City exemptions may not be included in this estimate.” Decatur exemptions definitely will not be included in the estimate on your assessment notice. Decatur maintains its own homestead exemptions and exemption data. DeKalb does not know how Decatur’s exemptions affect city bills for individual homeowners. To get a more accurate projection, pull out your Decatur tax bill from the 2nd installment of 2015. Look at the amount of tax savings due to homestead exemptions. Take that amount and subtract it from the city estimate on the assessment notice for 2016. If you have homestead exemptions with the City of Decatur, your actual bill in the fall of 2016 will be lower than what DeKalb estimates for your city taxes.

Please be aware that the current assessment notice no bearing on your property tax bill in 2015 or the city's 1st installment bill of 2016. Decatur’s 1st installment property tax bills are always based on the prior year’s value (your 2015 value). The assessment notice for 2016 does not change the value on your 1st installment 2016 city bill, and it does not change the amount that was due yesterday, June 1. Decatur’s 2nd installment trues up the total amount due for the year based on your final value and whatever millage rates are approved before the billing in October.

Lowndes County tax assessors challenge state law

The Supreme Court of Georgia has heard arguments in a case that could affect property valuations of low-income housing units statewide.

The Lowndes County board of tax assessors want to be able to factor in income tax credits when assessing the value of low-income housing properties. In other words, the assessor wants to increase the property assessment because the income tax credits that are tied to the property which increases the potential resale value of such housing units. 

An apartment complex owner that rents to low-income tenants in Valdosta says that the benefits of these tax credits should not be factored under the appraiser's methodology. Attorneys for the owner say that income tax credits are intangible benefits and should not be co-mingled with the assessment of tangible property.

Existing state law prohibits assessors from considering income tax credits in their assessments. The Lowndes County assessors are challenging that law arguing that it violates the state constitutional requirement for uniformity in assessments.  They assert that, similar to rent, income tax breaks make the property more desirable, resulting in a higher fair market value. Assessors are required to consider factors that affect the fair market value. The assessors' attorneys further note that voters rejected a constitutional amendment on the same subject in 2002.

This is a complex case. It will be interesting to see how the Georgia Supreme Court rules.

State representative files bill to cap property assessments

Property tax assessments in Georgia could be capped to increase by no more than 7.5 percent over any three-year period and no more than 2.5 percent in one year if House Resolution 965 passes during the upcoming legislative session. Rep. Brad Raffensperger’s (R-Johns Creek) bill would create a proposed constitutional amendment to be voted on statewide. An assessment cap has also been supported by Sen. Fran Millar (R-DeKalb) who has been influential in property assessment legislation in the General Assembly. Under HR 965, voters would have to approve a local assessment cap referendum as well in order for the cap to take effect locally. If the property is sold, transferred, or the owner has major work done on the property, there is no cap and the property is assessed on the basis of its fair market value. The proposal resembles California’s Proposition 13 which locked in property values at their value in 1978 while allowing for growth in inflation.

New rules expand training for appraisal vendors

Newly proposed rules would require training of county-level appraisal vendors and contractors by the Georgia Department of Revenue (DOR). Existing training requirements pertained to in-house county appraisal staff. Proposed rule 560-11-2-.28(7)(a) says:

Individuals performing services under assessment contracts to render advice or assistance to the county board of tax assessors in the assessment and equalization of taxes [sic] the establishment of property valuations, or the defense of such valuations shall adhere to state mandated appraisal laws and regulations required under Title 43 including any appraisal certification and training required under Title 43 of the Georgia Core [sic]. In addition, such individuals shall successfully complete 4 hours of approved appraisal courses annually… 

The proposed rules also include allowing PDF tax bills to be emailed to taxpayers, larger fines for mobile home owners who fail to display their tax decal, and administrative adjustments to appeal procedures. DOR is accepting comments on the proposed rules up until Dec. 21.

State senator pitches a cap on property assessments

In 2014, Sen. Fran Millar sponsored Senate Bill 293 to change procedures for appealing property values. That bill did not pass the state house. In 2015, Millar revisited the issue House Bill 202, which incorporated some proposals from the bill the prior year. HB 202 passed both chambers of the General Assembly and signed by the governor. 

For 2016, Millar says he’ll make another proposal for more reforms to assessments and appeals. He intends to prohibit boards of equalization from increasing property assessments based on information found by assessors while the property is under appeal.

Millar also says that, “we need to look at a cap on how much an assessment can increase in a given year.” Similar comments have been made by former state representative Ed Lindsey and Atlanta Journal-Constitution columnist Kyle Wingfield. They floated caps on assessment increases anywhere from 2 to 3 percent a year, while Millar has not specified a percentage.

Here’s what Millar wrote in an op-ed for the AJC a few weeks ago:

First, a Board of Tax Assessors cannot change a person’s tax assessment once it is published. One county is telling its Board of Equalization — the panel you face at an appeal hearing — that it has the power to raise a taxpayer’s assessment if evidence is presented that justifies such an increase. This needs to be prohibited by statute.

Second, one county is threatening to send letters to taxpayers that if they pursue an appeal, the Board of Equalization may increase the assessment without limitation. The taxpayer would be given a notice to sign and return if they wish to withdraw their appeal. This attempt to kill appeals also needs to be prohibited by statute. 

Third, we need to look at a cap on how much an assessment can increase in a given year. I am not sure what the correct percentage should be, but discussion needs to take place on this topic. Your thoughts are welcome.

Reminder about property appeal deadline

DeKalb mailed annual assessment notices to most property owners on May 29.  Property owners have 45 days to file an appeal with DeKalb County if they disagree with their value.  For most property owners that means that today, July 13, is the last day to file an appeal of your 2015 property value.  Follow the instructions or call the staff contacts at the phone numbers listed on your assessment notice, or call the DeKalb assessors main number at 404-371-0841 for further guidance.  If you wait until you get your next tax bill, it will be too late to appeal.

Lowndes County explains 6,000 erroneous tax estimates

The Lowndes County assessors office is explaining an error that caused almost 20 percent of the assessment notices they sent out to show an inaccurate doubling of property tax estimates.  All counties in Georgia have been required to send assessment notices annually since 2012, which include a tax estimate for the year.

From the Albany Herald on June 28:

VALDOSTA (TNS) — The Lowndes County Board of Assessors said it sent out 33,858 Notices of Assessments to Lowndes County property owners earlier this month, and about 6,000 of the notices showed a double billing for residential property owners in Special Lighting Districts. "There was a programming error in our software, and we didn't catch it," said Silas Hrobar, Chief Appraiser for the county, who said the lighting fee was figured twice in the calculation of the estimated property tax amounts.

Special Lighting Districts are those in which the developer and then the residents have agreed to share the cost of street lights in the development.

The Notice of Assessments containing the double billing are only estimates of tax amounts which will be due in November of 2015 for the year. "The duplication error will have no impact on the actual property tax bills which will come out later this year," said Hrobar.

The mistake is unfortunate, and I'm sure it alarmed a lot of residents in the Valdosta area.  But these glitches can occur when dealing with that much data.  The Lowndes County assessors office is currently displaying this message on their website:

Georgia Court of Appeals rules against tax sale buyers

Two people who bought multiple properties at tax sales in Newton County appealed and then sued to get a lower assessment on those properties. They argued that the amount they bid at the tax sales should have served as the basis for their assessed value the following year. The Georgia Court of Appeals has ruled against the buyers.  The court determined that tax sales doesn't constitute an arm's length, bona fide sale because 1) the original owner has a year to redeem the property, and 2) the original owner is not a party to the sale.

In training sessions and conferences I've attended, officials from the state Department of Revenue always emphasize that fair market value is what a willing buyer and a willing seller would agree to at an arm's length sale. In my opinion, a person losing their property at a tax sale isn't normally "willing" nor a "seller." So this seems like a pretty good decision to me. From the Newton Citizen last week:

COVINGTON — The Georgia Court of Appeals has upheld a ruling in favor of the Newton County Tax Assessor’s Office, affirming that a tax sale does not qualify as an “arm’s length, bona fide” transaction for the purpose of setting property tax values. 

Newton County Attorney Tommy Craig advised commissioners of the court’s ruling at the June 16 Board of Commissioners meeting. “I promised you we would win this case, and now we have,” he said.

According to the Appeals Court, property owners W.D. Ballard and Nancy Mock had purchased 22 parcels of land in Newton County at tax sales during 2012. In April 2013, the Tax Assessor’s Office sent Ballard and Mock the 2013 tax values of the properties, which did not match the 2012 tax sale purchase prices. Ballard and Mock unsuccessfully appealed to the Newton County Board of Equalization and to Newton County Superior Court, which granted summary judgment to the Board of Equalization. 

Ballard and Mock had argued that under Georgia law the 2013 assessed value should have been frozen at the tax sale value. According to the law, ” … the transaction amount of the most recent arm’s length, bona fide sale in any year shall be the maximum allowable fair market value for the next taxable year.” 

However, the trial court noted that the owner of property sold at a tax sale has a one-year right to redeem the property, which would essentially rescind the tax sale, and that the purchaser in a tax sale does not receive a fee simple title to the property. In addition, the court ruled that since the owner is not a participant in the sale, there is no arm’s length, bona fide sale. The Appeals Court upheld those findings. 

According to the Tax Assessor’s Office, Mock and Ballard purchased the 22 parcels, five of which included a house, between March 2012 and December 2012...

If the court had ruled the other way, it could have opened the door to confusion or discrepancies for properties that are sold in tax sales by a county and by a city during the same year.

HB 202 would modify assessment and appeal provisions

Georgia House Bill 202 would make several changes to existing property tax law especially regarding assessments and appeals, along with some routine housekeeping edits to the state revenue code. The House passed the bill on Feb. 20 with only one dissenting vote. The 37-page bill is divided into nine sections summarized as follows:

• Section 1 gives taxpayers the option of requesting bills and delinquent notices by email. 
• Section 2 shortens the public notice period before school millage rate adoption from two weeks to one week. 
• Section 3 allows notices of interest due to be sent by email upon taxpayer request. 
• Section 4 extends the deadline for counties to submit their tax digests to the state until September 1 rather than the current August 1 due date. 
• Section 5 would relax current parameters for two or more counties that wish to consolidate their property appraisal departments through intergovernmental agreements. 
• Section 6 would strike the penalties involved for not filing a return for real property. Penalties for unreturned personal property would remain in effect. 
• Section 7 extends the deadline for county boards of assessors to review property returns by two weeks. 
• Section 8 and 9 provide several changes to the appeals process including additional authorities vested in the clerk of superior court over appeals, changes to serving on a board of equalization, changes to the accrual of interest on appeals, new nonbinding arbitration procedures, and other tweaks to existing appeals procedures.  Section 9 is the largest and most complicated section of the bill. 

The bill is currently under review by the state senate. The Georgia Municipal Association’s position on this bill is “neutral.”  The Atlanta Journal-Constitution's legislative tracker gives HB 202 a 77 percent chance of passing this session.

Historically there tends to be one “big” legislative proposal every year at the General Assembly involving property assessments or appeals. As of now, HB 202 appears to be the only bill fitting that description this session. The changes proposed in the bill do not appear to be as sweeping as those presented by SB 293 which died in the House last year.

Bills to watch in 2015

The Georgia General Assembly convenes today. Here’s a look at some of the proposals at the Gold Dome that could affect taxes locally or statewide if enacted:

• Expansion of homestead exemptions in Decatur. The Decatur City Commission approved a proposal late last year to expand two existing homestead exemptions and add a new one. The next step would be for the General Assembly to pass it before a referendum that would take place later this year. 
• DeKalb property tax freeze. Both Rep. Mike Jacobs (R-Brookhaven) and state Sen. Fran Millar (R-North DeKalb) said during their 2014 reelection campaigns that they intend to renew the real property tax freeze in DeKalb. The freeze reduces county tax bills for all DeKalb's homeowners by offsetting increases in their assessed value (even for homeowners in Decatur), but does not affect your city taxes. 
• Decatur's proposed annexation. The Decatur City Commission has approved an annexation proposal in December and is looking for a legislative sponsor.  This would affect the property taxes of currently unincorporated residents if approved by the legislature and then by voters in a referendum later this year.
• Property assessment reform.  During his reelection campaign, Sen. Millar promised "to enact true property tax assessment reform" during the 2015 session that would affect assessments statewide.  We may see a reintroduction of a bill along the lines of SB 293 that Millar proposed last year. 
• Tax lien changes.  Newly elected state Rep. Beth Beskin (R-Buckhead) has proposed requiring certified notice before selling a property tax lien. Neither Decatur nor DeKalb sells liens, but the proposal would affect Fulton County which routinely transfers liens.
• PILOT assessment reform.  A special study committee met during the legislative break to review payments-in-lieu-of-tax agreements and their affect on school funding. While they focused on administrative changes rather than new legislation, there could be some proposals stemming from the committee's hearings to provide for greater involvement and notification by tax assessors of PILOT values to school boards for budgeting purposes.
• Tax credit changes.  There has been some discussion during the legislative break about changes to state tax credits (possibly including a reduction in the number of credits available but a continuation or even an expansion of the state entertainment/film tax credit).  There have also been two pre-filed bills that would affect state income taxes. HB 20 would extend the state income tax credit for low-income housing to any owner who owned it even for part of the tax year, and HB 35 would increase the amount of qualified education tax credits available.

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.

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.

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."

Legislative update on property tax assessments

Of the half dozen bills affecting property taxes that were still being considered by the Georgia General Assembly during the final days of its 2014 legislative session, only one bill ended up passing both chambers.

House Bill 954 adds some criteria to the calculation of fair market value by tax assessors; specifically, "Rent limitations, operational requirements, and any other restrictions imposed upon the property in connection with the property being eligible for any income tax credits" would be factored into assessments going forward.

The legislation would probably only affect the assessment of certain multi-family dwellings such as rent-controlled or government-subsidized housing units.  The original House bill was slightly amended by the state Senate before final passage to clarify that such property shall not be considered as comparable for assessments and appeals.  (My interpretation of that amendment is that, for example, the owner of a non-rent controlled apartment complex can't use the value of a rent-controlled apartment complex as a comparable property to justify an appeal.)

The bill still needs to be signed by Gov. Deal before it becomes law.  Even if he approves it, I would expect little if any change to Decatur's total tax digest value from this extremely narrow measure.

Property tax proposals to watch before the General Assembly adjourns

Dozens of property tax, sales tax, and motor vehicle tax proposals were introduced in the Georgia General Assembly during this legislative session. Only a few have survived as we near the last final days of the legislative session. These property tax and delinquent collections bills have been passed by at least one chamber of the General Assembly already, and will become law if approved by the other chamber over the next week and signed by the governor afterward. Several of the measures are intended to provide more fairness to taxpayers, but there’s not an overall theme to the legislation. Unlike tax proposals during the last couple legislative sessions, most of these bills are pretty narrow in scope. A brief description of each bill follows along with my own thoughts on how these may affect Decatur.

HB 69—Allows for the collection of homeowner, condominium owner, or other property owner association dues in the redemption price after a tax sale.
What this means is that if Decatur (or any other city or county) sells a property during a tax sale, the original owner still has a year to pay to redeem the property from the tax sale purchaser, but would now also be required to pay off any dues paid toward the property between the tax sale and the redemption date as part of the total redemption amount.

HB 412—Authorizes tax officials to provide electronic billing for property tax bills and delinquent notices and adds certain e-billing standards.
Some county tax commissioners in Georgia, such as Walker County, are already providing taxpayers the ability to “go paperless.” This bill puts certain standards in place for tax e-billing, including putting the words “STATUTORY ELECTRONIC SERVICE” in the subject line of emails. As Decatur considers launching e-billing during FY14-15, we would need to adhere to this standard if approved.

HB 819—Requires tax officials to carry out further due diligence steps to contact a delinquent taxpayer prior to transferring a tax execution (lien).
Before a tax execution could be transferred, the tax official must conduct a due diligence search using phone directories or Internet databases to identify the property owner’s most current contact information. The City of Decatur does not sell or transfer liens like Fulton County does, so this bill would have little impact here. Nevertheless, more thorough due diligence searches are in the interests of everybody, because it ultimately helps reduce the number of severely delinquent accounts.

HB 954—Adds some criteria to the calculation of fair market value by tax assessors such as whether the property is rent controlled or otherwise eligible for income tax credits.
This could have some affect on DeKalb’s assessments of certain multi-family housing units.

SB 293—Creates a misdemeanor charge and $1,000 fine against anybody at the board of tax assessors who fails to provide certain information requested by taxpayers regarding their assessment. The bill also expands the definition of distressed properties that could further reduce assessed property values in their vicinity.
This is the first bill I’m aware of that would impose individual fines and penalties on tax assessors. The intent is probably to assist taxpayers during the appeal process. Decatur does not assess property values but this legislation would affect the DeKalb assessors and local taxpayers seeking information from them.

SR 783—Provides for a referendum to amend the state constitution to stop the state from levying any property taxes.
The state portion of your property tax bill has undergone a gradual, legislative decrease since 2010 and will no longer be levied at all by 2016. This resolution would make the phase-out moot by prohibiting state property taxes in the constitution. This would not affect your city tax bill either way, because the state always collected its portion with the county billing. You would see a slight decrease (a few dollars) in your county bill either way since the state portion has already been phased out.

HB 390 pertains to sales taxes in DeKalb County for transportation projects.

HB 69, 412, 819, and 954 passed unanimously or near unanimously in the House, while SB 293, SR 783, and HB 390 each have opposition.

Georgia community taxed out of existence?

In coastal Georgia, the Geechee residents of Sapelo Island were notified last year and again this year of property assessments that increased by 500 or 600 percent. Residents who were used to paying a few hundred dollars in property taxes now have to pay thousands.

The tax bills may cause the mostly low-income residents of Hog Hammock in Sapelo to sell their homes and eventually dissolve the African-American community that's lived on the island since the 1700s.

The McIntosh County tax assessor's hands are tied.  State law requires assessments to be based on what a willing buyer and seller would agree to in an arm's length sale.  Recent property sales in Sapelo to mainland buyers have led to the skyrocketing assessments. Sales data is an essential component of modern assessment techniques.

Therefore, in my opinion, if Hog Hammock is to be preserved, the most logical route may be through special legislation, such as preferential tax treatment of Hog Hammock as a historic district, or targeted homestead exemptions or freezes that would reduce the tax bills.

However, proposals for a Sapelo Island study committee haven't gone anywhere during previous sessions of the Georgia General Assembly.

Residents are mounting a legal challenge to their assessments which, based on my understanding of Georgia's tax code, will be an uphill climb. 

A more effective approach than hiring a lawyer may be to hire a lobbyist to help them build a broader coalition of support at the state capitol in 2014.

 

New video made about property taxes in Georgia

The Association of County Commissioners of Georgia has produced a video entitled "Facts About Your Property Tax - An Investment in Your Community."

The video describes how local government services in Georgia are funded, the services that are typically provided, how budgets and millage rates are adopted, and how properties are assessed and billed.  The video also draws some comparisons to illustrate how much government services cost per taxpayer; for example, it says that your share for the cost of library services annually works out to about the cost of one hardback book.

The video says that the average county property tax bill statewide is about $1,500.  Taxes in cities tend to be higher than taxes in counties because cities traditionally provide more services than counties.

The video also makes the point that the annual assessment notice you receive in May details your options for appeal if you disagree with your assessed value.  It's suggested that the time to consider an appeal is when you receive the assessment notice, not later in the year when you receive your bill.

It's informative and worth watching.  My favorite scene is when the firefighter carries a dog from a house:

The ACCG has also launched a website called "Facts About Property Tax" with more information for Georgia property taxpayers.