As the annual NC property tax billing cycle comes to a close for most counties, we spoke with Greg French, the Assistant Tax Director of Guilford County, to gain insight on the discount billing period that his jurisdiction offers to their taxpayers.
Guilford County’s property tax discount period extends annually through August 31. If taxpayers pay their property tax bills by that date, they receive a 1% discount. Mr. French shared with us some of the reasons his county continues to offer a discount billing period.
The Pros and Cons of Discount Billing
There are advantages, says French, to both the jurisdiction and the taxpayer in offering a discount period.
The advantages to property owners are evident – they have the opportunity to pay less in taxes if they make their payment by the designated time.
In turn, the jurisdiction enjoys the receipt of cash earlier in the fiscal year than they would without the discount billing period. By September 1, barely two months into the fiscal year, Guilford County has usually collected a little over 60% of their entire tax levy!
Once the money has been collected, it’s there for the county to use for investments earlier or to spend on projects that have been approved in the budget for that fiscal year.
If you choose to offer a discount billing period, be aware that it will decrease the overall NC property tax levy that you collect. The difference is usually written off by the county tax department as a credit for the individual taxpayer if it is paid by the deadline.
For Guilford County, the cost of offering a discount period is outweighed by having the funds readily available for use earlier in the fiscal year. Plus, the discount has become something that the taxpayers have become accustomed to and enjoy.
Faster Cash Requires Quicker Billing
In order to give taxpayers in their county enough time make their payments before the end of the discount period, Guilford County has to be ready to create and mail the bills as early as possible after the fiscal year begins.
This requires them to stay on top of their data throughout the first six months of the calendar year so that their only holdup is awaiting that year’s property tax rate. As you know, county commissioners have through the end of June to decide on the rate.
“Ideally,” says French, “you should be able to send out your property tax bill almost immediately after the last jurisdiction has agreed on the tax rate for the next fiscal year. You’ve got to be ready. Your data has to look good. We don’t wait until July to look for inconsistencies. We stay on top of it throughout the spring and are able to keep up with the data and fix any inconsistencies ahead of time.”
Guilford County annually bills and collects NC property taxes for twelve municipalities, twenty-three fire districts, and five special districts, including over 200,000 parcels of land. It can be quite a challenge, but Guilford County’s goal is always to complete their billing cycle by the second week in July. This year, they got everything sent out by July 15.
Having a well performing property tax system is half the battle. “We’ve been able to continue the early July billing since we’ve implemented NCPTS as our system,” says French. “The system performed very well this past billing cycle.”
In addition, this was a revaluation year for Guilford County and they had fifteen new tax districts to add to their billing cycle. “With Farragut’s help we were able to incorporate these new districts into the system and still do our billing by the middle of July,” French told us.
Overall, the choice to go with a discount property tax billing period is your choice and really depends on the preferences of individual counties. There are both positives and negatives in offering the discount. You have money coming in immediately and keep the citizens in your district happy, but overall have a decrease in the property tax levy for your county.
*Special thanks to Greg French, Assistant Tax Director for Guilford County, for providing his advice on annual property tax discount billing in his county.