Property Taxes are an important means of collecting much needed revenue for Northampton County. Although nobody really likes to pay taxes, we realize that it is one of the certainties in life. Northampton County's budget is based on setting a tax rate which (when combined with other sources of revenue) will generate the minimum amount necessary to fund required services and enable departments to perform their roles in achieving goals set by the Board of Supervisors. Historical collection rates must be considered in the budgetary equation to account for amounts that may not be paid during the first year of collections. For example, a drop in first year collections in real estate taxes from 95% to 93% would mean that $277,289 in revenue would not be realized (this equates to a little more than one penny on the tax rate). A 3% decrease in the personal property tax collection rate means a decrease in revenue of approximately $88,270. The more taxes that go uncollected, the higher the tax rate is required to balance the budget and this increases the tax burden for those that pay on time. This is why the County is working hard to keep collection rates as high as possible and work with those experiencing financial difficulties to keep their taxes current; in order to keep the tax burden equitable for all citizens.
The other part of the property tax equation is property assessments (or the value assigned to the property in question). Basically, the assessed value divided by $100 is multiplied by the tax rate to determine the tax due. Because the budget is driven by service goals and objectives of the Board; once assessed values are known and the level of revenue is determined which will fund the goals and objectives endorsed by the Board, a tax rate can be determined that will produce that amount of revenue. For the FY10 operating budget, the County needed revenue of just over $15 million in current year property taxes to fund its budgetary needs. If the property assessments had been lower, the tax rate would have had to be higher in order to generate the same amount of revenue. If the property assessments were higher, the tax rate could be lower in order to generate the same revenue. This is why Counties are required by Virginia code section 58.1-3321 to calculate and advertise its equalized tax rate for each property re-assessment (the rate that would generate no more than 1% new tax revenue based on the new assessed values).
Many people may not realize exactly how their County property taxes are used. Without property taxes in place, Northampton County would not be able to fund the services its citizens depend upon and those required by the state and federal governments (such as contributions for schools, social services and courts). In Northampton County, property taxes are the largest source of local revenue and fund 66% of the General Fund Operating Budget.
The General Fund Operating Budget provides services including the local share of funding for education, social services and other jointly operated agencies such as the 911 Commission, Libraries, Community Services Board, Planning District Commission and the Eastern Shore Regional Jail. It also includes funding for the Sheriff's law enforcement activities, emergency medical services, animal control, building inspections, and contributions to volunteer fire departments. The General Fund also supports general and judicial administration for the County, facilities management (facilities for schools, social services, and courts are all required to be provided by the County according to Virginia code). Also funded in the General Fund through a combination of local taxes and user fees are the County's solid waste collection centers, solid waste transfer station and parks and recreation programs for the County's children and adults. A portion of property tax funding also goes to fund the County's community and economic development activities including planning and zoning. Other expenses include debt service on the County's infrastructure, worker's compensation and property insurance. So while nobody likes paying property taxes, they are essential to the operation of our County. Everybody has to pay them and paying them on time helps keep the tax rate lower for everyone.
Making a Payment by Credit Card
For your convenience, the County accepts credit card payments for property taxes through a website called Official Payments. Official Payments is the trusted payment services partner of the United States Internal Revenue Services, 25 state governments, the District of Columbia, more than 2,500 local and municipal government agencies, more than 400 colleges and universities, and other public and private interests in all 50 states. The website is dedicated to making payments fast, easy, and secure for their customers, by providing the best technology available, the highest level of security, and exceptional customer service. A convenience fee of 3% (with a minimum of $1.00) for this service is charged to the taxpayer. The website for this service ishttps://www.officialpayments.com. The Customer Service telephone number is 1-888-357-8394.
Collections Tools Available to the Treasurer and Finance Staff
The Treasurer and Finance Staff may use a number of tools to ensure the collection of all delinquent taxes, penalties, interest, and fees owed to the County of Northampton. All collection costs incurred by the County are passed on to the taxpayer as allowed by Va. Code § 58.1-3958. In addition to any collection fees, the County currently charges a 10% penalty and 10% interest on all delinquent taxes.
The following are collection methods currently in use by the County for delinquent property taxes:
Court Process
The County, in addition to other means of collection, may file suit in the appropriate court of either the General District Court or the Circuit Court. The court has the power to determine the taxes, penalties and interest due and enter judgment in favor of the County. If a judgment is obtained, the debtor must also pay court costs in addition to the base tax, penalties and interest to release the judgment.
Virginia Debt Set-Off Program
In 1983, the General Assembly enacted legislation authorizing State Agencies to set-off the Virginia income tax refunds due individual taxpayers with past due accounts. In addition, Virginia lottery winnings in excess of $600 are also subject to set-off. Before issuing income tax refunds, Virginia law requires a check of any outstanding debts with agencies of the Commonwealth of Virginia, Virginia local governments, the Virginia court system and the Internal Revenue Service. If any such debt is found, regardless of the type of tax return filed, all or part of the refund may be withheld to help satisfy the debt and processing of the individual's return will be delayed. Four percent of the delinquent amount is kept by the Commonwealth for administrative fees in addition to the base tax amount, penalties and interest. An administrative charge of $25 is added on a per claim basis to each delinquent account to cover the cost of this program. (Virginia Code Sections 58.1-520.1 and 58.1-523)
DMV Stop Program
Through the Virginia Department of Motor Vehicles Vehicle Registration Withholding (DMV Stop) Program, the County will ask the DMV Commissioner to withhold registration or registration renewals for any taxpayer who owes delinquent taxes, penalties, interest, and fees to the County of Northampton. Once a DMV Stop has been placed on an account, the taxpayer must pay the entire amount due with certified funds (cash, money order, or cashier's check) or credit card to get the Stop removed. The stop will be removed within one business day of payment. An administrative charge of $20 is added on a per vehicle, per year basis to each delinquent account with an amount due over $20 to pay for the cost of this program. (Virginia Code Section 46.2-752
Publication of Delinquent Taxpayers List
Delinquent taxpayer lists may be published annually in the local newspaper and are published on the County's website for all taxpayers with delinquent balances greater than $20 as of June 30. (Code of Virginia Section 58.1-3921)
Third Party Liens
The Treasurer applies in writing to any person indebted to or having in his hands estate of a taxpayer for payment of taxes more than 30 days delinquent. Payment by this third party will entitle him or her to a credit against such debt or estate. The taxes, penalties, and interest constitute a lien on the debt or estate due the taxpayer from the time the application is received. For each application served, the person applied to is entitled to a fee of $20. Staff will also send a copy of the application to the taxpayer with a notice informing him or her of the lien. (Code of Virginia Section 58.1-3952). These may include, but are not limited to the following:
- Wage Liens
The Treasurer makes arrangements with the delinquent taxpayer's employer to garnish the wages of the delinquent taxpayer in the amount that is owed. It may be necessary to garnish more than one paycheck in order to satisfy the tax liability.
- Bank Liens
The Treasurer makes arrangements with the delinquent taxpayer's bank to recover from the taxpayers' account(s) the amount that is owed.
- Rent Liens
The Treasurer places a lien against all rental income due the taxpayer to recover the amount that is owed. (Code of Virginia Section58.1-3944)
Seizure of Personal Property or Assets, "Boot-Tow Orders" or "Till Taps"
The Treasurer or Finance Staff may prepare a Distress/Seizure Warrant and work with the Sheriff's Office to seize property and/or assets that can be used to satisfy or can be sold to satisfy delinquent taxes. The Treasurer or Finance Staff may issue an order to "boot" or tow the delinquent taxpayer's vehicle until such time that the taxpayer pays all outstanding taxes. These properties are sold through auctions that are open to the public.
The Treasurer of Finance Staff may also use a Distress/Seizure Warrant for the Sheriff's Office to enter a business and seize the cash from the cash register for payment of delinquent taxes. (Code of Virginia Sections 58.1-3919 and 58.1-3941).
Seizure of Real Estate
When real estate taxes remain delinquent as of the December 31 following the second anniversary of the original due date, The Treasurer may work with the Court to seize the property and sell it to satisfy the delinquency. These properties are sold through public auctions. Substantial attorney's fees and costs of sale are the responsibility of the debtor. (Code of Virginia Section 58.1-3965 et seq.)