HB732 (2007) Detail

Changing the interest rate on late and delinquent property tax payments and subsequent tax payments.


HB 732-FN – AS INTRODUCED

2007 SESSION

07-0987

10/03

HOUSE BILL 732-FN

AN ACT changing the interest rate on late and delinquent property tax payments and subsequent tax payments.

SPONSORS: Rep. Kaelin, Hills 4; Rep. C. Chase, Hills 2; Sen. DeVries, Dist 18

COMMITTEE: Municipal and County Government

ANALYSIS

This bill changes the interest rate on late tax payments, delinquent property tax payments, and subsequent tax payments to a rate based on the Internal Revenue Service quarterly rates.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

07-0987

10/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Seven

AN ACT changing the interest rate on late and delinquent property tax payments, and subsequent tax payments.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Interest Rate Changed. Amend RSA 76:13 to read as follows:

76:13 Interest. Interest at [12 percent per annum] the most recent Internal Revenue Service quarterly rate for individual underpayments shall be charged upon all taxes except resident taxes, except as otherwise provided by statute, not paid on or before December 1 after their assessment, which shall be collected from that date with the taxes as incident thereto, except in the case where a tax bill sent to the taxpayer on or after November 2 and before April 1 of the following year interest shall not be charged until 30 days after the bills are mailed. Interest due in an amount up to $25 may be waived by the collector, with the approval and consent of the board of selectmen and the board of assessors, if in the collector’s judgment the administrative and collection costs involved do not warrant collection of the amount due. The tax collector shall state on the tax bill the date from which interest will be charged and such date shall be determined by the day the collector sends out the last tax bill on the list. The collector shall notify the board of tax and land appeals in writing of the date on which the last tax bill was sent.

2 Collection of Taxes; Interest Rate. Amend RSA 80:32 to read as follows:

80:32 Redemption. Any person with a legal interest in land so sold may redeem the same by paying or tendering to the collector, or in his absence, at his usual place of abode, at any time before a deed thereof is given by the collector, the amount for which the land was sold, with interest at [18 percent per annum] a rate equal to the most recent Internal Revenue Service quarterly rate for individual underpayments plus 2 points upon the whole amount for which the land was sold from the time of sale to the time of payment in full, except that in the case of partial payments in redemption made under RSA 80:33-a, the interest shall be computed on the unpaid balance, together with redemption costs and costs for notifying the mortgagees, if any. In case the tax collector who sold the property in question shall have died, become incapacitated, been removed from office or removed from the town or city or shall have been discharged from his or her bond by the selectmen or assessors, then the person with the legal interest in redeeming the property may tender such sums to the tax collector then in office of said city or town. Upon advice from the selectmen or assessors that the amount tendered is the correct amount due, the tax collector shall accept said amount for the redemption of the property.

3 Collection of Taxes; Interest Rate. Amend RSA 80:37 to read as follows:

80:37 Payment of Subsequent Tax. For purposes of this section, “subsequent tax” shall mean any tax assessed upon the real estate subsequent to that for which it was sold by a municipality, a county, or the state. The purchaser of real estate at any tax sale may pay to the collector any subsequent tax and the collector shall, within 30 days after such payment, notify the register of deeds thereof, giving the date and the amount of such payment and the name of the person so paying together with the date of the tax sale, the name of the person taxed, and a description of the property sold as shown in the report of sale recorded in the registry of deeds. The collector of taxes shall receive $1 for such notice to the register of deeds of the payment of subsequent tax plus $1 to be paid to the register of deeds. The purchaser, within 30 days of payment of the subsequent tax, shall personally, or by certified mail, notify in writing any mortgagee who was notified of his or her purchase at the tax sale of this payment of the subsequent tax. The purchaser paying the subsequent tax shall receive the same fees prescribed for notifying the mortgagee of his purchase at the tax sale to be included in his costs to be paid by the person making redemption, except that when a town is a purchaser at a tax sale and the town pays a subsequent tax and the selectmen direct the collector of taxes as agent for the town to give notice of payment of a subsequent tax to any mortgagee who was notified of the purchase by the town at the tax sale, the collector shall be paid the sum of $5 for this service. Any amounts so paid on account of subsequent taxes, together with interest thereon at the rate [of 18 percent per annum] equal to the most recent Internal Revenue Service quarterly rate for individual underpayments plus 2 points from the date of payment shall, in addition to the purchase price at the time of sale with accrued interest and costs, be paid by the person making redemption.

4 Collection of Taxes; Interest Rate. Amend RSA 80:69 to read as follows:

80:69 Redemption. Any person with a legal interest in land subject to a real estate tax lien may redeem the same by paying or tendering to the collector, at any time before a deed thereof is given by the collector, the amount of the real estate lien, with interest at [18 percent per annum] the most recent Internal Revenue Service quarterly rate for individual underpayments plus 2 points upon the whole amount of the recorded lien from the date of execution to the time of payment in full, except that in the case of partial payments in redemption made under RSA 80:71, the interest shall be computed on the unpaid balance, together with redemption costs and costs for identifying and notifying the mortgagees, if any. In case the tax collector who executed the tax lien against the property in question shall have died, become incapacitated, been removed from office or removed from the town or city or shall have been discharged from his or her bond by the selectmen or assessors, then the person with the legal interest in redeeming the property may tender such sums to the tax collector then in office of said city or town. Upon advice from the selectmen or assessors that the amount tendered is the correct amount due, the tax collector shall accept said amount for the redemption of the property.

5 Collection of Taxes; Interest Rate. Amend RSA 80:75, III to read as follows:

III. When a municipality is the lienholder and the municipality pays a subsequent tax and the selectmen direct the collector of taxes, as agent of the municipality, to give such notice of said payment to any owner and to any mortgagee as provided above, the collector of taxes shall receive the same fees provided for the lienholder for his or her service. The amount of subsequent taxes paid, together with interest on such taxes at the rate [of 18 percent per annum] equal to the most recent Internal Revenue Service quarterly rate for individual underpayments plus 2 points from the date of payment shall, in addition to the tax lien amount at the time of execution with interest and costs, be paid by the person making redemption.

6 Effective Date. This act shall take effect April 1, 2007.

LBAO

07-0987

1/12/07

HB 732-FN - FISCAL NOTE

AN ACT changing the interest rate on late and delinquent property tax payments and subsequent tax payments.

FISCAL IMPACT:

      The Department of Revenue Administration and New Hampshire Municipal Association state this bill may decrease local revenue and increase local expenditures by an indeterminable amount in FY 2007 and each year thereafter. This bill will have no fiscal impact on state and county revenue or expenditures.

METHODOLOGY:

    The Department of Revenue Administration and New Hampshire Municipal Association state this bill changes the interest rate on late tax payments, delinquent property tax payments and subsequent tax payments to a rate based on the Internal Revenue Service quarterly rates. The bill allows for the interest rate on delinquent property tax payments and subsequent tax payments to be based on the Internal Revenue Service quarterly rate plus two percentage points.

    The New Hampshire Municipal Association used 2004 estimated revenue information from the Interest and Penalties on Delinquent Taxes reported on the Department of Revenue Administration’s MS-4 form. The estimated interest and penalties amount for 2004 was $13,000,086. The Association assumed 80-90 percent of that amount would be interest. The Association determined the average Internal Revenue Interest rate between 1/1/2004 and 12/32/2006 was 6 percent, half the current rate of 12 percent charged on late tax payments. The interest rate increases by 2 percentage points to 8 percent when a lien is filed, 10 percent less than the current interest rate of 18 percent. For its calculations, the Association conservatively estimates the interest rates would decrease by half the current interest rates. Based on this assumption local revenue may decrease between $5.2 and $5.8 million.

    The Department of Revenue Administration determined the interest rate for late payment of taxes at 8 percent using the Internal Revenue Service current rate. The Department also determined the interest rate upon lien at 10 percent, the Internal Revenue Service current rate of 8 percent plus 2 percentage points. Based on the difference from 12 percent to 8 percent interest rate for late payment of taxes and from 18 percent to 10 percent interest rate upon lien, the Department conservatively estimates interest revenue may decrease by 35 percent.

    The Association and Department also state municipalities may have increased expenditures as a result of programming changes to municipal tax billing programs each quarter the interest rates are adjusted.

Links

HB732 at GenCourtMobile

Action Dates

Date Body Type

Bill Text Revisions

HB732 Revision: 10930 Date: Jan. 11, 2010, midnight

Docket