Monday 4/3/07 at the Montpelier Grandlist seminar Tanya Perry was asked a question that she said she would review with other Tax Department employees to double check her answer. After doing so- here’s the response.
The question that was asked: Taxpayer anticipates a tax bill of $500.00. Although taxes are not due until November, the taxpayer makes a payment to the town of $250.00 in July. The State also sends the town a payment of $500.00 in July which creates an overpayment on the taxpayer’s account of $250.00. Does the town mail the property owner a refund 60 days from the date of the overpayment or 60 days from the due date of the tax bill?
Answer:If the town receives an amount from the state on July 1 that exceeds current and prior year(s) liabilities, the town must refund the over-payment, without interest, to the taxpayer within 60 days of July 1. Otherwise, the town keeps the money and simply applies it - regardless of whether they bill annually or quarterly.
Here is the law as it reads:
Sec. 3. 32 V.S.A. § 6066a (f)(3)
(3) The payment received by the municipality from the state for credit to the taxpayer shall be credited first to current-year property tax on the homestead parcel, next to current‑year homestead parcel penalties and interest, next to any prior year homestead parcel penalties and interest, and last to any prior year property tax on the homestead parcel. No payment shall be allocated to a property tax liability for any year after the year for which the claim or refund allocation was filed. If the payment received by the municipality exceeds the amount allocated under this subsection, the municipality shall refund the excess to the taxpayer, without interest, within 60 days of receipt by the municipality. No municipal tax-reduction incentive for early payment of taxes shall apply to any payment made to a municipality by the state under this chapter.