Once again, New Jersey and Illinois ranked as the two worst states in the country when it comes to property taxes, according to a new survey from personal finance website WalletHub. In order to identify the states with the highest and lowest property taxes, WalletHub’s analysts compared the 50 states and the District of Columbia using U.S. Census Bureau data to determine real-estate property tax rates. While property taxes vary from county to county across the state, WalletHub divided the “median real-estate tax payment” by the “median home price” in each state to determine the property tax rate.
For the second year in a row, Georgia took the top spot in Site Selection magazine's Top US Business Climates: 2014. The magazine releases its annual rankings each November. The Peach State had been a strong performer in this contest for several years, rising in the ranking steadily thanks to its Quick Start workforce training program, logistics infrastructure and economic development leadership, among other factors, according to Site Selection. The magazine's ranking methodology is as follows: 50 percent of the overall Business Climate Ranking is based on a survey of corporate site selectors who are asked to rank the states based on their recent experience of locating businesses in them. The other 50 percent is based on an index of seven criteria: performance in Site Selection's annual Competitiveness ranking; total New Plant Database-compliant facilities in 2013; total new facilities in 2013 per capita; total 2014 new projects year to date; total 2014 projects year to date per capita; state tax burdens on mature firms and new firms according to the Tax Foundation and KPMG Location Matters analysis.
Attorneys for a group of poor Alabama schoolchildren and their parents are asking the U.S. Supreme Court to considering scrapping Alabama's property tax system, which the group believes to be unfair to minority students. According to Al.com, the group argues that Alabama's property tax system, which collects the lowest taxes in the country per capita, was set up to give wealthy landowners low rates, ensuring limited funding for public schools attended by minority children in Alabama's rural black belt. Although a U.S. District Court in Huntsville and the 11th Circuit Court of Appeals have both sided with the state, the plaintiffs argue the case is important enough for the Supreme Court to take it up. The new petition was filed in Lynch vs. Alabama. Veteran Alabama civil rights attorneys Jim Blacksher, Larry Menifee and Edward Still are continuing to argue the current system is unfair and the lower courts misapplied the law. The cert petition to the Supreme Court is joined by Eric Schnapper, a professor at the University of Washington. Schnapper is listed as counsel of record on the petition.
The Alabama House of Representatives overwhelmingly approved a slate of tax bills last week, and now the four bills are headed to the Senate, where another easy approval is expected. Representative Greg Wren (R – Montgomery) and House Speaker Mike Hubbard (R – Auburn) co-sponsored House Bill 108, and it was part of the House Republican Caucus’ “Commonsense Conservative Agenda” for 2014. One main aspect of the new legislation is an independent agency would become responsible for overseeing taxpayer disputes, rather than the Department of Revenue's administrative judges settling disagreements. Lawmakers believe the current system gives too much power to the agency, and Republicans have dubbed HB 108 the "Taxpayers' Bill of Rights."
Jefferson County, Alabama is missing out on nearly $3 million in uncollected property taxes due to the lack of agents on staff. According to AL.com, the unpaid and uncollected money means that the funds are not going to school districts, municipalities, or the State of Alabama. Jefferson County itself has missed out on $570,000 because of uncollected taxes.
In an article entitled “Pitfalls in the Redemption of Property by Lenders” published in the BABC’s Real Estate Finance Newsletter, a recent ruling by the Alabama Court of Civil Appeals is discussed. According to the article, if an Alabama property owner does not pay their property taxes, a public auction is held and the property may be sold to the highest bidder. Before the recent case, as long as the back taxes were paid, the property could be redeemed by the either the delinquent tax payer or the lender holding the mortgage. However, the Alabama Court of Civil Appeals addressed the rights of redemption by various parties in First United Security Bank v. McCollum. Not only did the court’s ruling provide a windfall to the property owner that failed to pay their property taxes, thus allowing his property to be sold at a tax sale, but their decision also penalized the lender for redeeming property in order to protect its interest.
The VictoryLand gambling resort just east of Montgomery, Alabama failed to pay $1.3 million in state and local property taxes for 2010. The resort has also been unable to make payments to lenders for its luxury hotel ever since their electronic bingo casino was shut down. VictoryLand, which pulled in huge crowds from Alabama and Georgia, had to close down 6,000 machines in the casino in order to prevent a raid from the Alabama Task Force Against Illegal Gambling. The revenue lost from the shutdown of the casino has also prompted the closure of the hotel and restaurants on the resort campus.
Alabama implemented annual reappraisal in 2003. This change mandated that all real estate and personal property be reassessed annually. Most taxpayers receive an assessment notice in the mail; however, the tax assessor is not required to notify taxpayers of a change to their values unless there is an increase over the prior year’s assessment. If the value does not increase, the assessor need only publish a notice in the local paper that the year’s reappraisal work has been completed and that the tax rolls may be inspected at the courthouse.
To challenge a tax value, an appeal must be filed with the secretary of the local board of equalization within 30 days of the notice date (either the date posted in the paper or an individually mailed notice). Taxpayers who have not yet received a notice should contact their local county assessor. The appeal deadline will necessarily vary from jurisdiction to jurisdiction but usually falls between April and June of each year.
Tax amnesty is a limited-time opportunity for a specified group of taxpayers to pay a defined amount, in exchange for forgiveness of a tax liability (including interest and penalties) relating to a previous tax period or periods and without fear of criminal prosecution. In some cases, legislation extending amnesty also imposes harsher penalties on those who are eligible for amnesty but do not take it. State tax amnesty programs have been around for many years, but more states have used them recently due to shrinking state tax collections.
Effective March 24, 2009, Alabama is imposing a new failure to timely pay penalty. The new penalty applies to any tax amount that was required to be shown on any tax return, if the tax remains unpaid after 30 calendar days from the date the department notifies the taxpayer of the unpaid amount (Alabama Act 2009-144).
According to the Alabama Department of Revenue (ADOR), the most common situations where the new penalty would be imposed are tax audits or tax return adjustments. The new late payment penalty would apply to a tax liability determined during an audit or following the adjustment of a taxpayer's return, if the tax remains unpaid for over 30 days after the taxpayer receives notice that the tax is due.
Application to Annual Returns
For annual returns with unpaid tax amounts, the new late payment penalty is calculated at one percent of the amount of tax due per month, or fraction of a month, that the tax remains unpaid. The failure to pay penalty cannot exceed 25 percent of the total amount of tax determined to be due.
For more information about Alabama's tax penalties, go to http://www.revenue.alabama.gov/prdocs/New%20Payment%20Penalty.pdf