Northampton County, Virginia

Why Pay Property Taxes?

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 is https://www.officialpayments.com. The Customer Service telephone number is 1-888-357-8394.

Courtesy Payment Arrangements for Personal Property Taxes due to Financial Hardship

A payment arrangement is one of the customer service initiatives provided by the County to help its citizens minimize additional collection fees during times of personal financial hardship. As a courtesy to our citizens, payment arrangements may be set up at any time for Personal Property taxes, unless certain delinquent collection actions have commenced. Once a warrant has been issued, payment arrangements are no longer an option. If a DMV Hold has been issued, minimum payment requirements must be met before a payment arrangement may be made and the Hold released. The purpose of the arrangement is to move the delinquent taxpayer to a position where he has no outstanding delinquent liabilities and can avoid additional penalties and interest on future tax assessments. The following guidelines apply to payment arrangements for delinquent personal property taxes:

• 50% to 60% minimum down payment for first time payment arrangements or customers who have shown consistency and good faith with prior payment arrangements
  
  
• 75% minimum down payment if previous payment arrangement terms were not met with timely payments as agreed
  
  
• •100% of the outstanding balance must be paid if two previous payment arrangement terms were not met with timely payments as agreed
  
  
• If previous collection efforts have not been effective and a DMV Registration Hold is in place (All payments for DMV Hold releases must be made by cash, money order or cashier’s check in order for the Hold to be released immediately. Personal checks are accepted, but the Hold will not be released until the check clears the bank):
  • accounts owing $250.00 or less must be paid in full before the DMV Hold will be released
  • 50% to 60% minimum down payment and a satisfactory payment arrangement
  • a minimum down payment of 75% and a satisfactory payment arrangement for second time DMV Hold releases
  • 100% of the outstanding balance must be paid for third time DMV Hold releases

Taxpayers may be given payment period options up to 18 months. The taxpayer will be given the amount of the monthly payment based on the number of months and the balance due. Tax assessments that fall due within the chosen period will be included in the arrangement.

Payment arrangements may NOT be approved if:

• More than two previous payment arrangements went into default within the past five years.
• The amount due is not suitable for a payment arrangement.
• The taxpayer demands an amount that will not meet the time requirements set by the above policy.

If accepted, payment arrangements stay in effect until the debt is paid, and no other action will be taken, except for set-off debt transactions, as long as:

• No monthly payments are missed in accordance with the arrangement
• The taxpayer stays current with any tax filing requirements and makes timely payment of any other tax obligation not covered in the payment arrangement.
• The County is provided with correct, complete, and current address, bank and financial information when requested.

If the above terms are not met, the County reserves the right to revoke the payment arrangement and pursue other actions to collect the amount due.

For more information, please contact the Finance Department at 757-678-0444, ext. 500.

Delinquent Real Estate Property Tax Collections

Collections of delinquent real estate taxes are handled by the County Treasurer’s department which can be reached at 757-678-0450.

Delinquent Personal Property Tax Collections

County taxpayers are encouraged to make payment promptly in order to avoid penalties, interest and collection fees. Payment arrangements are available as described above but will not alleviate the taxpayers’ responsibility for penalties and ongoing accrued interest. Since July, 2005, the County’s Finance Department has assisted with the collection of delinquent personal property tax collections for accounts over six months past due. 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 personal property taxes:

• Warrants in Debt – The Warrant in Debt is filed with the Va. Court System and results in a judgment against the delinquent tax payer if awarded by the judge. Once a Warrant is filed, court costs must be collected prior to release in addition to the base tax, penalties and interest.
• 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. The program is administered by the Virginia Commonwealth University Collection Unit. 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. The Code of Virginia Set-Off Debt Collection Act, Sections 58.1-520 through 58.1-535, authorizes and governs this program. Four percent of the delinquent amount is kept by the Commonwealth for administrative fees in addition to the base tax amount, penalties and interest.
• DMV Withholding Program - The Department of Motor Vehicles operates a program that enables local governments to place a “hold” on the registration renewal for vehicles on which delinquent taxes are owed. This program requires the delinquent information to be entered in the DMV system by secure access. Once a “hold” is in place, the DMV requires a $20 release fee which must be paid in addition to the base tax, penalties and interest.
• Contracted Collection Agencies – Northampton County uses the recipient of the state contract award for third-party collection services. These third-party firms use skip-tracing to find forwarding addresses and reports past-due amounts to the three major credit agencies (Equifax, Experion and TransUnion) when authorized by the County. Collection agencies are authorized to collect fees of 9% to 15% in addition to the base tax, penalties and interest.