VIRGINIA BEACH
As of December, about 8,000 taxpayers had missed the deadline to pay real estate taxes. Each delinquent got a 10 percent penalty added to the tab, the most allowed by state law.
Now some city officials are pushing for a lower penalty.
"We're not encouraging anybody to pay their taxes late," Councilwoman Rosemary Wilson said, "but if you're one day late and you have a 10 percent penalty, that can be pretty harsh."
Wilson wants the City Council to study whether and how to reduce the penalty. The council is slated to discuss the idea today, and a report could be completed next month.
"Your main concern is to try to help people who are facing tight times," Councilman Jim Wood said. "We have to look at that in the overall context of the city budget."
How much revenue the city could lose is unclear, but City Treasurer John Atkinson said late fees on real estate taxes amounted to $1.2 million in 2007. The penalties - and interest - become effective the first day a deadline is missed, he said. The 10 percent late fee has been in place since 1965, according to city records.
Atkinson said the fee made sense when tax bills were lower. As property assessments rise, Atkinson said, the penalty can be unfair to those who miss deadlines for legitimate reasons.
Wood said circumstances can include mailing issues, errors by the city and honest mistakes by the taxpayer.
To illustrate, Atkinson used himself as an example. He bought a house in Bay Colony in 1970 for about $37,000. He said it's now worth about $800,000. With an annual tax bill of more than $7,000, a late payment would come with a penalty of at least $700.
"Should we cry for somebody who has an $800,000 house?" Atkinson asked. "Probably not, but he's kind of the rule now."
Ron Williams, the treasurer in Suffolk, said the 10 percent penalty has been the standard in his city for roughly 30 years.
"Ninety-nine-point-nine percent of the localities use 10 (percent)," Williams said.
He added that penalties on personal property taxes - items such as cars and boats - can be as high as 25 percent of a late bill.
The Norfolk treasurer, officials there said, also charges a 10 percent penalty and 10 percent annual interest.
Virginia Beach Councilman John Uhrin questioned whether the Beach committee would study personal property tax penalties as well. Atkinson said those fees generated about $2.5 million in 2007.
Wood said the committee may look at that but its focus remains property taxes.
"What we're trying to do is help people that are truly in need," he said. "It's something that we can do to help."
Wood said the city would need a way to determine "when you have someone who is a scofflaw... or when you have someone who genuinely forgets."
Atkinson, who first suggested the reduction to Wilson, said a "sliding scale" could solve the issue.
Circumstances for a late payment could be considered and penalties levied accordingly.
"The bills are huge, and we are penalizing them," Atkinson said. "I think they may be out of proportion with the offense."
Staff writers Dave Forster and Harry Minium contributed to this report.
Richard Quinn, (757) 222-5119, richard.quinn@pilotonline.com
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Late Fee
How about a realistic tax assessment of my home instead? Having assessments rise an average of 20% the past 4 or 5 yrs running in my case is absolutely ridiculous. Is this so the city can mismanage the revenue collected as a result and spend it on things we dont really need? You can bet I'm voting in November.
The "Fine and Penalty" Budget!
I'd love to hear this statement aswell, "The city is losing millions by not writing enough traffic tickets". Counting your chickens before they hatch will get you in trouble especially if you spend based on the sale of said chickens.
"How much revenue the city
"How much revenue the city could lose is unclear, but City Treasurer John Atkinson said late fees on real estate taxes amounted to $1.2 million in 2007."
City losing revenue? This is money that if everyone paid their taxes on time wouldn't be available to the city in the first place. The city isn't losing anything - this is a windfall. Sounds like Atkinson is actually hoping people will be late.
Lowering Penalties
While the city is lowering the penalty for not paying taxes can we get them to lower the cost of a speeding or parking ticket? Gas is getting expensive so we have less money to pay fines with. Can we get the state to lower tolls and state tax? Own property = pay taxes. It's not like they "crept up" and caught you by surprise. You don't pay on time = you pay a penalty. It should be a stiff penalty to persuade you not to do it again, to get you attention. I guess the beach, in lowering the late fee penalty will find some other place to raise our taxes to make up for the lost money.
Perhaps the late fee could be based on how late it is?
10 percent if 30 days or more.
7.5 percent if 16 to 30 days.
5 percent if 1-15 days late.
I find the best way to pay my real estate tax is to treat it like a monthly bill, and this works fine for the second installment of the real estate tax because their is a tax bill number. Prior to receiving the first installment, however, I cannot pay ahead because there is no tax bill for the money to be directed to.
Our city needs to get out of the dark ages and devise a way for homeowners to pay monthly toward their real estate tax.