Property Tax Collection for Other Tax Authorities

tax authorities

Did you know that if you have delinquent taxpayers for another taxing unit within your borders, you could be liable for those unpaid taxes?

It’s true. G.S. 105-364 sets forth the specific responsibilities for property tax collection when you have another taxing unit’s delinquent taxpayer or his or her qualifying property within your borders.

First, to be held responsible, you must receive a Certificate of Unpaid Taxes and a copy of the tax receipt from the original taxing authority within 10 years of the original tax due date.

This sets in motion your responsibility to exhaust all means of property tax collection for the unpaid taxes. The statute is clear that you must expend the same effort to collect another taxing unit’s unpaid taxes as you would if the taxes were owed directly to your taxing unit.

Duties to Report

You must also submit a response to the Certificate of Nonpayment within thirty days.  This response should state that you have either succeeded in your efforts of property tax collection, have begun the process of collecting the taxes, or cannot collect them.

At ninety days from the date of the Certificate of Unpaid taxes, your taxing unit must again submit a report on your property tax collection efforts, either that the taxes have been collected or that you are unable to collect the taxes.

If you respond that you are unable to collect the taxes, you must do so under oath, stating that you have used every means available for collecting the unpaid taxes.

Duties to Collect

There is one bright spot in property tax collection for another taxing authority – your taxing unit is allowed to assess a 10% penalty on top of the delinquent tax amount that is then payable to your general fund. Upon successfully collecting the unpaid taxes, your taxing unit has a duty to submit the tax revenue to the original taxing unit within five days of the receipt.

As mentioned earlier, your taxing unit can be held liable for the unpaid taxes if you don’t meet your responsibilities as set forth in G.S. 105-364. If you fail to make the thirty or ninety-day reports or do not make a statement under oath that you are unable to collect the unpaid taxes, your taxing unit will be on the hook for the unpaid taxes.

Be sure that your taxing unit meets these key deadlines to ensure that your county doesn’t end up on the losing end of property tax collection.

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