published Wednesday, August 17th, 2011

Partial payment plan recoups Hamilton County tax revenue


2010-11 Hamilton County property taxes

* Billed $216,258,981.92

* Unpaid $12,588,451.72

Source: Hamilton County Trustee’s Office

Hamilton County collected $1.3 million in property taxes last year as part of a new partial payment program designed to help owners struggling to pay the full amount.

Before the 2010 tax year the county had an all-or-nothing approach to property tax collection, said County Trustee Bill Hullander. Last fall Hullander sought state approval for a program that allows property owners to make partial payments and prepay tax bills. The program raked in $1.3 million during the 2010-11 fiscal year, which ended June 30.

“This past year we actually took in a little more than we did before,” Hullander said, attributing part of last year’s $257,000 increase in property tax revenue to the new program.

Hullander, who was elected in 2010, said he heard repeated complaints about the system while he was on the campaign trail. “Before, if someone owed a tax bill of $1,000, and you came down here with $900, they wouldn’t take it,” he said.

His office asked the state comptroller to allow Hamilton County to collect partial payments for property taxes on real estate and personal property, including business equipment.

The county’s Information Technology department designed computer software to process the bills. Then the comptroller approved the program and software used to implement it.

Fifty-nine counties now have state-approved partial payment programs, said Blake Fontenay, spokesman for the state’s Comptroller of the Treasury.

In the 2010-11 fiscal year unpaid taxes accounted for about 6 percent, or $12.6 million, of the total amount billed to taxpayers.

Though the program allows for partial payments, property owners are still responsible for penalties and interest on any portion left unpaid by the annual property tax deadline — the last day of February. The penalty rate is 1.5 percent per month, or 18 percent annually.

Property owners usually have at least three years to pay back taxes. Then, in the fourth calendar year after the taxes are due, the county can include the property in its annual tax sale.

“We’ll end up getting most of [the back taxes] before we sell the property,” Hullander said.

Before the recent economic downturn, residents with properties on the delinquent tax rolls often paid off the balance before the property went to tax sale, Hullander said.

But 306 properties were included in this year’s sale.

“There were more pieces of property in it than in previous years,” Hullander said.

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about Ansley Haman...

Ansley Haman covers Hamilton County government. A native of Spring City, Tenn., she grew up reading the Chattanooga Times and Chattanooga Free Press, which sparked her passion for journalism. Ansley's happy to be home after a decade of adventures in more than 20 countries and 40 states. She gathered stories while living, working and studying in Swansea, Wales, Cape Town, South Africa, Washington, D.C., Atlanta, Ga., and Knoxville, Tenn. Along the way, she interned for ...

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