Blogmeister note: This is one of three important posts today. Make sure you read all three and be sure to weigh in with your pithy comments.
In the last few months the flaws in the property tax collection system has become more apparent:
1.We have determined recently that the interest charged on the delinquent property taxes under the current tax law is simple interest and not compounded interest.
2. It is now clear there are chronic delinquent property tax payers in Utah to the tune of $14 million in Weber County, and well over $100 million dollars statewide, that consistently withhold their property tax payments rather than pay them on November 30th each year.
3. Unless HB 23 (Rep. Hunsaker) passes in this session, the State and counties will continue to collect about $60 million in delinquent taxes annually that are not reflected in each county's certified tax rate throughout the State. This means that the taxpayers never realize the benefit of the collected funds that could lower future property taxes. Simply stated, unless HB 23 passes, the counties will continue to budget as if they have never collected these delinquent taxes.
4. The current penalty and interest for delinquent taxes is not sufficient to encourage large businesses and property owners to pay their taxes on time. The State legislature should approve a significant increase in the penalty and interest, and the interest should be compounded to discourage the use of the tax collection system as a low interest loan.
Most organized groups seem to oppose any change in the property tax laws based on the argument that any change in the tax laws usually will shift the tax burden to someone else in the state. This proposed increase in penalty, interest, and compounding the delinquent interest will ONLY impact those that choose to pay their taxes late. If these delinquent taxpayers pay their property taxes on November 30th along with most Utah citizens, they won't have to pay a dime in penalties or interest.
Utah counties have a tax review committee that reviews appeals, extensions and possible waivers on penalties and interest regarding property taxes. This is done on a case by case basis and should continue. This process protects those that are in financial trouble so they would not lose their property.
The present property tax collection system is favorable to those large delinquent taxpayers who continue to exploit this tax loophole at the expense of the majority of Utah property taxpayers. This is a statewide issue and affects every Utah property taxpayer.
If this sounds like a call to arms, it is. With over $100 million in delinquent propert taxes due State wide, and another $60 million in paid delinquent taxes not part of the accounting process every year, the average Utah taxpayer needs help. They are not getting it from most elected officals at any level in the State. Despite notification to the media in our area and Salt Lake, no major media outlet will touch this story. Seldom will any of us have a chance to influence such a clear cut issue. When you consider how long this process has been going on and what these issues have cost the Utah taxpayers, the urgency of action speaks for itself.
Larry and Sharon Zini