Annapolis Royal, Nova Scotia - Where History Meets Opportunity

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Phone: 902.532.2043

Tax Collection

Policy No.: 2017-10
Supersedes: 
Effective Date: July 17, 2017
Approval By Council Motion No.: 14

 

PURPOSE

To establish a policy for effective and efficient billing and collection of tax accounts receivable. The purpose of the policy is to:

  • Outline billing dates as required by the Municipal Government Act (MGA);
  • ensure municipal tax revenues are collected in a timely and effective manner;
  • ensure that all taxpayers are treated fairly and equitably; and,
  • provide staff with guidance for informed and sustainable decision making, consistent with the Municipalities organizational values of excellence and fiscal responsibility.

 

SCOPE

All employees involved in the collection process must adhere to the policy statements contained within this document.

  • All tax levies and amounts added as tax liens are subject to these policy statements.
  • The Municipal Government Act legislates the billing and collection of taxes and is the primary authority on the tax billing and collection function, including but not limited to the tax sale process.
  • The Tax sale process will only proceed with clients owing over $250.00 for prior year taxes.

TAX ACCOUNTS

BILLING

The Town will issue an interim tax bill with a due date of May 31st each year. The bill will be calculated at 50% of the prior year’s bills with the discretion of the Director of Finance to adjust any tax accounts where the variance between the prior year and current year assessment is substantial.

The final tax bill will be due on November 30th.

INTEREST

Interest will be calculated and accrued monthly, on arrears, starting immediately after the due date on all taxes / rates /liens outstanding. The interest rate is set at 18% per annum.

Interest is not paid on credit balances in tax accounts except if the credit has resulted from payment of taxes on an account that has been appealed (assessment) and the resulting tax amount is less than the original tax billing (determined after the final bill).

TAX COLLECTION GENERAL PRACTICES

Provisions of the Municipal Government Act (MGA) Section 6 deal with Tax Collection and provide the legislative framework within which the Staff are expected to carry out tax collection. This policy is intended to provide more specific guidance in certain circumstances but is not intended to allow staff actions contrary to the Act or to limit the authority given to Staff under the Act.

Staff will make all reasonable effort to collect taxes due to the Town. This includes reasonable effort to locate taxpayers whose whereabouts are not readily known. A number of procedures common to the collection industry may be used including the use of outside agencies as outlined in administrative policies approved by the CAO.

The MGA provides that every person liable to pay taxes shall be served with a tax bill, to be mailed to the address shown on the filed roll or to a more current address if known to the Director of Finance.

The Town of Annapolis Royal considers it to be the responsibility of the property owner to ensure their address is up to date on the assessment roll and the tax system. The Town will be deemed to have a more current address if the notification has been received in writing from the taxpayer at least 30 days prior to the invoice date of the tax bill following the notification. Having filled the legal requirement to bill as noted above, the Town considers it to be the taxpayer’s responsibility to contact the Town to determine amounts owing for taxes if they have not received their bill.

The Town accepts no responsibility to notify new property owners of arrears against properties they buy after the filing of the annual assessment roll except for the usual tax billing process. It is the responsibility of the purchaser and their solicitor to ensure that taxes for the year of purchase are paid. The Town will make every effort possible, within the staff resources available, to change ownership information on properties as it becomes available from the Property Valuation Services Corporation but will not accept responsibility for interest that may accrue on tax arrears that remain unpaid as a result of a change of ownership.

PAYMENT ARRANGEMENTS

Staff have authority to enter into tax arrears payment arrangements with taxpayers giving due consideration to the taxpayer’s personal circumstances and history of the taxpayer to comply with prior tax payment agreements. Staff may make reasonable demands for personal financial information from a taxpayer. No provision in this policy requires a taxpayer to provide such personal information but failure to do so may preclude the acceptance of a payment arrangement for their arrears. If a tax arrears payment arrangement results in taxes being outstanding for more than six years the arrangement must be documented in writing to ensure the period of tax lien is extended to cover the property.

PROPERTIES IN TAX SALE POSITION

At June 30 of each year all accounts will be reviewed. Accounts that have current year tax outstanding and part or all of prior year tax outstanding shall be considered to be in tax sale position. The CAO is authorized toadopt administrative guidelines that identify minimum amounts below which the second years’ taxes will not trigger the tax sale procedures.

Tax Sale properties shall be sent a preliminary notice giving 60 calendar days to pay the account in full. The preliminary notice shall indicate that a title search and/or survey of the property may be commenced at the end of the 60 days without further warning – the cost of which will constitute a lien on the property in question.

Once a preliminary notice is issued, staff are still permitted to enter into payment arrangements with the taxpayer. Any such arrangement should not normally extend beyond the end of that fiscal year at which time the account must be paid in full.

Properties for which there are no negotiated payments arrangements will be submitted for title search after a list of eligible properties is provided to Council. A survey will be done, if found to be necessary. A Notice of Intent to sell for taxes shall be issued on each property no earlier than January 15 of the following calendar year.

Once a property has been issued a Notice of Intention it should not normally be removed from the tax sale process except as a result of full payment. Staff may determine when circumstances dictate otherwise and remove a property from the list.

If payment arrangements as negotiated above are dishonored staff will immediately, without notice, begin or continue the formal process of tax sale unless other arrangements satisfactory to Staff can be negotiated.

REAL PROPERTIES NOT IN TAX SALE POSITION

For properties not in tax sale position reminders will be issued to individual assessed owners. The number and timing of reminders will be determined by staff, taking into consideration the perceived beneficial financial impact. In any given year there will generally be 2-3 reminders sent to accounts with arrears over a predetermined limit.

 

COLLECTION PROCEDURES INVOLVING ISSUANCE OF WARRANTS

The CAO is authorized to adopt administrative guidelines with respect to the issuance of warrants to collect taxes due.

In the event that services of an outside agency are used, staff are authorized to pay the fee charged by that agency for execution of the warrant. Such fee should be determined in accordance with the procurement policy adopted by Council. If a staff member executes the warrant they will be compensated in accordance with municipal policy if the work is conducted outside of normal office hours. Such fees and expenses associated with the issuance of a warrant shall be added to the account to be collected pursuant to the warrant.

TAX ACCOUNT ADJUSTMENTS/WRITE OFFS

The CAO may approve administrative policies governing the write-off or adjustment of taxpayers accounts. In general staff has authority to write off accounts in the following circumstances:

  1. Where notice is received from PVSC that an error has been made in the filed roll which cannot be corrected by any provision of the Assessment Legislation (e.g. Duplicate Assessment, Delete Accounts)
  2. Where there has been an error made by Municipal staff or in other circumstances deemed appropriate, the Director of Finance may approve the write-off of interest on an account.
  3. Where the internal and external cost to pursue collection of an account would reasonably be expected to exceed the amounts to be successfully collected.
  4. Where a taxpayer has been discharged from their liabilities under bankruptcy.

COLLECTIONS COSTS

The CAO is authorized to approve certain fees and procedures associated with tax collection on a cost recovery basis such as, but not limited to, fees for cheques.

 

PROPERTY TAX DEFERRAL

Section 70 of the MGA allows Council to adopt a bylaw which would provide for the postponement of tax payment. Council has determined that it will not enact a by-law under the provisions of this section with the understanding that staff are authorized to negotiate payment arrangements that are reflective of the taxpayer’s ability to pay at any given time and that staff are best able to determine what this regular amount should be. The MGA provides that tax sale can be avoided by having a tax payment arrangement that is being honored. All taxpayers should be encouraged to make some amount of regular payment on their taxes, however nominal, such that a deferral programs is not considered necessary.

Tax Collection Policy- Signed

 

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