Property Tax Post: Late Payments Likely to Cause Losses


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Property taxes have been in the news once again, as reports surfaced that the Trump Organization has missed several property tax deadlines in recent months, costing the company over $61,000 in late fees, penalties, interest, and lost discounts, as the Washington Post notes. In light of this vast sum, it seems worthwhile to examine exactly what happens when paying property taxes late in various jurisdictions.

Many states provide rather harsh penalties for late property tax payments, which makes sense considering that property taxes are the largest source of state and local government revenue. For example, in Alaska, interest begins to accrue from the date the taxes were due until the taxes are paid in full at a rate of 15 percent per year. In addition to interest on the unpaid tax, Alaska may impose an additional penalty of 20 percent. Wyoming also imposes interest on late property tax payment at a high rate—18 percent per year until all taxes are paid.

Failure to pay property taxes in a timely manner can also cause a taxpayer to lose the opportunity to reduce their tax bill. Florida provides a 4 percent early payment discount for property taxes paid by Nov. 30. Kentucky also allows for an early payment discount, at a rate of 2 percent, if property taxes are paid in full by Nov. 1 of the assessment year. The amount of New Jersey’s early payment discount depends on how early the taxes are paid. The state provides a discount of 0.5 percent for each month that payment is made prior to the due date, up to a 6 percent total discount. While paying property taxes early may not always be feasible, it is certainly worth considering if taxes are owed in a state with a generous discount.

Regardless of whether you owe taxes on a grand resort or a tract of unimproved land, it’s clear that the costs of making late property tax payments add up quickly.

Continue the discussion on Bloomberg Tax’s State Tax Group on LinkedIn: How does your state handle late property tax payments?

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