The Rip Off of the Average Utah Taxpayer

If you have been following the Ogden Valley Forum posts on delinquent property taxes, you should be aware of the long term misuse of the property tax collection system in Weber County and other Utah counties.

Simply stated, the current property tax collection process used by Weber County and other Utah counties, has provided a tax loophole for some business and developer property owners who choose to use it to avoid paying their yearly property taxes for up to almost 5 years before sale or foreclosure. During this time period of non payment, they are assessed only a 2% penalty and about 6.5% interest. In effect, this a low cost loan courtesy of the County and State (which really means the rest of the taxpayers).

We, the other taxpayers meanwhile provide the money for the State and County services when we pay our property taxes on time every year.

We have contacted our Weber County Commissioners and after much hand wringing on their part, they have investigated and determined there is currently about $14 million in delinquent and uncollected property taxes in Weber County.

In our discussions and correspondence with the Weber County officials and the Utah State Tax Commission, we have received some vague answers on why this tax loophole exists and varied opinions on whether it is a good thing for Utah taxpayers or not.

We feel the best way to address this issue and in order to clear up the confusion and any inaccurate information, would be to list the questions we are most frequently asked and the answers to those questions.

1. Q: State Representative Gage Froerer is proposing a bill in the State Legislature (HB 418) that may increase the delinquent tax penalty (from 2% to 10%) and interest (from 6.5% to 18%) on delinquent taxes. What would that accomplish?

A: The bill will increase significantly the amount of paid taxes into the County and State coffers as of November 30th of each tax year. This will provide more cash flow for services, education and all property tax funded government applications. Most individuals and corporations that use the current system to defer paying their yearly property taxes will quickly realize it will be very difficult to earn a larger return with other investments. These suggested increases are high but lower rates would encourage the same behavior by delinquent taxpayers in the future when other available investments for their money improved.

2. Q: If they raise the penalties and interest, who will be affected, and what about those small property owners that may be struggling with their property taxes?

A: Any increase in the penalty and interest rate will affect ONLY THE DELINQUENT TAXPAYERS! It will not add to current property taxes, and in the long term, the additional funds collected may reduce your taxes or delay the timeframe for future property tax increases.

For those property owners that appeal their tax bills for various reasons, Weber County and most counties have a Tax Review Committee to consider the appeals, grant extensions, and/or waiver requests on property taxes. This Committee functions in Weber County today and should continue to provide the taxpayers an opportunity to be heard on tax related issues on a case by case basis.

3. Q: I have been told that the current collection law has worked well for the counties, State, and the taxpayers, so why change it?

A: With the astounding amount of uncollected and delinquent money involved statewide (in excess of $100 million) and in Weber County ($14 million), during a time when sales tax revenue is down, cutbacks and layoffs are increasing every day within the counties and State, it is not difficult to conclude that any additional significant revenue would be helpful to all government agencies.

4. Q: Can the Utah County governments also enhance their tax collection methods to help reduce the amount of the delinquent and uncollected taxes within their County?

A: Weber County could require the Assessor's office to review the tax records to identify taxpayers that may be illegally claiming the residential tax exemption on more than one property. Weber County could also expand the subdivision ordinance regarding delinquent taxes to deny any further county assistance to a property owner that owes delinquent taxes on ANY parcel of land in Weber County.

It may be helpful to ask our elected leaders: If the current loophole in the law is really a good deal for the taxpayer and governments as some would have us believe, why haven’t our State and County leaders told EVERYONE to use this tax loophole and defer their property tax payments on November 30th each year instead paying on time?

We should be demanding answers from our County and State leaders on this delinquent tax issue. It is daunting to think of how long this collection procedure has provided this tax loophole for the deliberate delinquent taxpayers, and how much has it has cost the other Utah taxpayers over the years?

In addition, any tax collection system that provides a tax advantage for large property owners and businesses to defer property taxes for almost 5 years while most of the other taxpayers are expected to pay their taxes on time is arbitrary and unacceptable.

The final question may be, what are our elected officials going to do about this inequitable property tax collection law? Our County leaders claim this must be solved at the State level, but we feel our County Commissioners can also assist with additional tax collection methods within the County. The County leadership should also be the most prominent voices in Salt Lake urging the legislature and Governor to take immediate remedial action on this issue by increasing the penalty and interest on delinquent property taxes.

We urge you to contact your state and county representatives to right this obvious wrong. We do have the support of the Utah
Taxpayers Association on this issue.

Larry and Sharon Zini