Now is a good time to apply for 2014 homestead exemptions

If you need to file for a new homestead exemption in Decatur for 2014, this is the perfect time of year. Filing within the next month will help ensure that your exemption appears on your 1st installment tax bill which will be mailed out April 1.

If you previously applied for a homestead exemption with the City of Decatur, you do not need to re-apply with us. If you filed for an exemption with DeKalb, you must also apply with Decatur. If you only applied with Decatur, you should also apply with DeKalb.  You must also apply if you qualify for a new exemption based on age or income. Further information on local homestead exemptions can be found at www.decaturga.com/homestead.

Eligible residents can apply for the basic homestead exemption on our website here. For exemptions based on age or income, please come to City Hall at 509 North McDonough Street.

Income tax help at Decatur Recreation Center

If you’re a senior and need help with your income taxes, AARP is offering sessions twice a week at the Decatur Recreation Center, 231 Sycamore Street, between now and April 11.

From BeActiveDecatur.com:

Tax Help! AARP* Tax Aide counselors will be on hand at the Recreation Center to offer free assistance to seniors with federal income tax returns every Wednesday and Friday from 10am-2pm starting February 5 through Tax Day. So bring your materials, sign in with the counselor, and take a few laps around the indoor walking track while you wait.

*(AARP Foundation Tax-Aide offers free, individualized tax preparation for low-to moderate-income taxpayers nationwide – especially those 60 and older.)

If you pay local property taxes and itemize deductions on your federal income tax return, you'll want to bring records of what you paid in property taxes to the Tax Aide counselors. You can access your property tax receipts at www.decaturgatax.com.

The DeKalb Library system has information about additional AARP tax sites in the area, and VITA tax assistance which is available to all taxpayers, not just senior citizens here.

Business license renewal deadline Jan. 31

Businesses in Decatur should pay their annual occupational tax by tomorrow. There will be a lengthy grace period for payments during which no penalties or interest will be charged, but businesses should renew by the deadline in order to maintain a valid license.

You can come to City Hall to renew, or you can mail in your renewal materials with the return envelope we enclosed with the invoice we sent you in November.

If you prefer to pay online, go to this site. For the year, select 2014 (except for lawyers, who should select 2013 instead). For the “business name,” enter your business's name it actually appears on your bill. Once you’ve found your record, click “renew” to pay. You'll be prompted to upload your notarized and completed immigration-related affidavits.

Paypal is our payment gateway, but you do not have to have a Paypal account to pay online. You'll want to check out as a guest, then Paypal will give you the option of selecting which type of credit card you want to use.  If you run into any difficulties online, please call us at 404-370-4100 and we'll try troubleshooting it.

Decatur's occupation taxes are levied on persons, partnerships, corporations, or other entities operating or engaging in an occupation, profession, or business within the city limits of Decatur. The City of Decatur uses profitability ratios to assign tax rates to six different classes of business ranging from $195 to $485 annually.

Homeowner associations crackdown on delinquent accounts

Homeowner associations have become more aggressive in the last few years delinquent collections on unpaid fees. A recent Reuters article highlighted a homeowner association in Kentucky that foreclosed on a homeowner for $288 in unpaid fees. The now former homeowner rents the house that she lived in from the person who bought her foreclosed property.

The article mentions that the woman received 30 notices in the mail from the association. One issue that we run into as a taxing authority is that a few delinquent taxpayers like simply ignore the bills or letters that they receive, even if language used gets more severe with each mailing.

That is part of the reason why we don’t limit ourselves to regular mail. Sending certified mail, setting liens, notifying mortgage companies, making phone calls to owners, advertising delinquent accounts in The Champion, and physically posting a notice on the property on a wooden stake prior to the tax sale are methods that we use to try reaching property owners before the delinquency reaches a tax sale scenario.

I’m not sure what methods homeowner associations are using besides mail to get the attention of delinquent owners, but as a best practice I would suggest that a variety of methods before foreclosure, which should be a last resort.

Deducting real estate taxes paid from your income taxes

*Note:  Please contact a tax professional for tax advice*

If you are itemizing deductions on your 2013 federal income tax return, you can deduct property taxes paid on real property (land and structures) that you own.

Local fees are a different matter.  IRS Publication 530 says that “itemized charges specific to property or persons,” cannot be deducted because they are not “taxes,” even if they are paid to a taxing authority.  The publication lays out specific examples of nondeductible fees, stating that “a periodic charge for a residential service (such as a $20 per month or $240 annual fee charged for trash collection)” is nondeductible.

Generally speaking, payments for Decatur’s residential sanitation and stormwater utility, may fall into this category of nondeductible charges.  For a single-family home in Decatur in 2013, the residential sanitation charge was $235, and the stormwater charge was $75.

Other nondeductible payments include penalties and interest on delinquent taxes paid if applicable.

Tax payments toward the five funds listed on Decatur tax bills (capital, DDA, bond, the general fund, and school taxes) are deductible.

If you are deducting real estate taxes paid from your income taxes, you’ll want to keep a copy of your second installment Decatur property tax bill, which is a restatement of your total taxes owed and paid for the year (and a copy of your DeKalb tax bill) in your income tax file.  You can access a bill reflecting your payments or a receipt at www.decaturgatax.com.

This post is intended solely to bring awareness of the distinction that the IRS draws in its official publications on the real estate tax deduction, and is not intended as instructions on how you should file or how much you should deduct.  Since individual circumstances vary, please contact a tax professional for further guidance.

 

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!

Lessons for cities from the Target breach

The theft of credit and debit card data from Target stores during the Christmas shopping season is a reminder of the necessity for merchants to incorporate rigorous safeguards into their payment acceptance environment.

The City of Decatur and any other government entities that accept credit card payments qualify as “merchants” under payment card industry (PCI) standards. 

Decatur handles over 10,000 credit card transactions representing over $1 million annually across different departments and facilities.  Although this is a tiny volume of transactions compared to big chain stores like Target, and although we do not use point-of-sale devices such as those suspected in the Target breach (keypads with magnetic stripe readers and digital signature pads), the City is not immunized from the risk of breaches.

We have been working over the past several months on enhancing protections of credit card data for our taxpayers and other paying customers, and have begun receiving vulnerability scans on a monthly basis.

 
Funds were approved in Decatur’s FY13-14 budget to have a formal PCI gap analysis conducted by a an approved scanning vendor, and we are close to entering an agreement for the service.  This analysis would be performed under new, more comprehensive payment card standards (PCI-DSS 3.0) standards that go into effect tomorrow.

Attorney deadline in 10 days

If you are practicing law in Decatur, your annual occupation tax of $400 and administrative fee of $25 are due no later than Dec. 31.  This tax is for revenue purposes only.

Several lawyers have already taken advantage of our new web service which allows for payments to be made online by credit card with no additional fees. 

If you intend to pay online, go to this site.  For the year, change the selected year to 2013 (lawyers pay for the current year, while all other professionals and businesses pay for the upcoming year).  For the “business name,” enter your actual name as it appears on your bill (first name first, last name second).  Once you’ve found your record, click “renew” to pay.  Please do not select 2014 and do not search by the name of your law firm.

Reminder: property taxes due Friday

Decatur’s second installment tax payment deadline for 2013 is Friday, December 20.

 

If you are not sure whether your bill has been paid or have misplaced your bill, you can check your account online at www.decaturgatax.com or call us at 404-370-4100.

 

The bills were originally mailed out in October.  Penalties and interest will begin accruing on Jan. 8.

 

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.

 

Decatur bills 638 insurance companies

Earlier this month, Decatur sent bills for $75 to 638 insurance carriers that write policies in the city.  Insurance companies can mail in their payments or--for the first time--pay by credit card online at www.decaturgatax.com/BusinessLicense.

State law says the license fee is imposed on insurance companies “for the privilege of engaging in the business of insurance” within Georgia’s cities.  The fee varies by city based on population in accordance with a state formula.

At $75 per carrier, Decatur’s insurance company billing for 2014 amounts to $47,850.  The fee payments represent about 10 percent of the city’s total occupational tax revenues, which go toward city operations and services.  During the last fiscal year, the city collected about $43,500 in license fees from insurance companies.

 
Our tax collection rate from insurance companies tends to be lower than other occupational tax types partly because of unpredictability and variation in the insurance market each year.  If an insurance company writes no business in Decatur in a given year, they are not required to pay the fee for that year.

In addition to their payment, insurance companies are required to file a notarized affidavit annually regarding their compliance with immigration laws.  If they renew online, they can just upload their affidavit rather than mailing it in.

Local, independent insurance companies are required to obtain a regular business license from City Hall which may run from $315 to $425 annually.

The city does not regulate insurance practices; Georgia’s insurance commissioner regulates insurance companies and licenses insurance agents.