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Thank you, Mary Jane, much appreciated!
----- Original Message -----
From: [log in to unmask] href="mailto:[log in to unmask]">Grace, Mary Jane
To: [log in to unmask] href="mailto:[log in to unmask]">[log in to unmask]
Sent: Monday, October 20, 2008 7:57 AM
Subject: FW: education tax liabilities in the event of pending tax appeal

 

 

Yes, it is a payment from the State.  It is controlled by 32 VSA Sec. 5412(b); see below.  It can come in the form of offset against education tax liability or a direct payment to the municipality.  Since it is the Town that owes the back taxes, generally the direct payment would be better because the credit would not reach the Town until the Education Department is able to reduce the school district liability and also reduce the transfer of tax receipts from the Town to the District. 

 

(b) To the extent that the municipality has paid that liability, the commissioner shall allow a credit for any reduction in education tax liability against the next ensuing year's education tax liability or, at the request of the municipality, may refund to the municipality an amount equal to the reduction in education tax liability.

 

Three things to keep in mind.

 

·        The municipality must meet the procedural requirement of notice, etc. as specified in 5412.

·        Sec. 5412(a)(1) was amended and the language below does not include the amended language which reads “(a)(1)  If a listed value is reduced as the result of an appeal or court action, and if the municipality files a written request with the commissioner within 30 days after the date of the determination, entry of the final order, or settlement agreement if the commissioner determines that the settlement value is the fair market value of the parcel, the commissioner shall recalculate the municipality’s education property tax liability for the year at issue, in accord with the reduced valuation, provided that:”   The major difference in the language is that the Section now requires that if the parties settle the litigation, that  settlement is subject to review by the commissioner of taxes and the commissioner must make a determination that the settlement is reasonably representative of the fair market value of the property in question.

·        If litigation is resolved on or before March 15th of the same tax year the appeal was originally taken, then the municipality can have its education liability for that year adjusted (without resort to 32 VSA 5412) by transmitting to PVR their revised grand list values by March 15th.  PVR will then provide these values to the Education Department and the final payments from and to the Education Fund on April 30th and June 1st will be adjusted.  In most cases, this will then require the school district to make a payment to the Town for the appropriate amount.  It is possible though that if the Town has a final tax collection installment after March 15th that the Town can get the funds by reducing the taxes transferred to  the school district (and the school district will be made whole by the final netting payments on April 30th or June 1st.

 

 

 

 

Mary Jane Grace, Program Technician

Property Valuation and Review Division

Vermont Dept. of Taxes

802-828-5863

 

 

From: Vermont Municipal Government Discussion Network [mailto:[log in to unmask]] On Behalf Of Guildhall Town Clerk
Sent: Monday, October 06, 2008 5:57 PM
To: [log in to unmask]
Subject: Re: education tax liabilities in the event of pending tax appeal

 

Thanks.  I've seen this--I just wanted to clarify how the recouping of the money actually happens.  Is it a payment from the state?

----- Original Message -----

From: [log in to unmask] href="mailto:[log in to unmask]">Grace, Mary Jane

To: [log in to unmask] href="mailto:[log in to unmask]">[log in to unmask]

Sent: Monday, October 06, 2008 9:00 AM

Subject: Re: education tax liabilities in the event of pending tax appeal

 

 

There is a provision in Chapter 135 of Title 32 that offers recourse if the property in question represents a substantial portion of your grand list.  You may want to take a look at 32 V.S.A. §5412.  It requires the town take action within 30 days of the filing of an appeal to the Director of the Court.

§ 5412. Valuation appeals and recalculation of education tax liability

(a)(1) If a listed value is reduced as the result of an appeal, and if the municipality files a written request with the commissioner within 30 days after the date of the settlement agreement, determination, or entry of the final order, the commissioner shall recalculate the municipality's education property tax liability for the year at issue, in accord with the reduced valuation, provided that:

(A) the reduction in valuation is the result of an appeal under chapter 131 of this title to the director of property valuation and review or to a court, with no further appeal available with regard to that valuation;

(B) the municipality notified the commissioner of the appeal, in writing, within ten days after notice of the appeal was filed under section 4461 of this title; and

(C) as a result of the valuation reduction of the parcel, the value of the municipality's grand list is reduced at least one percent.

(2) The municipality's request shall include a copy of the agreement, determination or final order, and any other documentation necessary to show the existence of these conditions.

(b) To the extent that the municipality has paid that liability, the commissioner shall allow a credit for any reduction in education tax liability against the next ensuing year's education tax liability or, at the request of the municipality, may refund to the municipality an amount equal to the reduction in education tax liability.

(c) If a listed value is increased as the result of an appeal under chapter 131 of this title, whether adjudicated or settled, with no further appeal available with regard to that valuation, the commissioner shall recalculate the municipality's education property tax for each year at issue, in accord with the increased valuation, and shall assess the municipality for the additional tax at the same time the commissioner assesses the municipality's education tax liability for the next ensuing year, unless the resulting assessment would be less than $300.00. Payment under this section shall be due with the municipality's education tax liability for the next ensuing year.

(d) Recalculation of education property tax under this section shall have no effect other than to reimburse or assess a municipality for education property tax changes which result from property revaluation. (Added 2001, No. 63, § 279, eff. June 16, 2001; amended 2007, No. 65, § 393, eff. June 4, 2007.)

 

 

 

Mary Jane Grace, Program Technician

Property Valuation and Review Division

Vermont Dept. of Taxes

802-828-5863

 

 

From: Vermont Municipal Government Discussion Network [mailto:[log in to unmask]] On Behalf Of Guildhall Town Clerk
Sent: Thursday, October 02, 2008 10:57 AM
To: [log in to unmask]
Subject: education tax liabilities in the event of pending tax appeal

 

 

Hi everyone,

I have a few questions today for you all, will start with this one.  I'm interested in hearing from any and all of you and also Mary Jane at PVR.

The largest taxpayer in our town (a corporation) is appealing their tax assessment.(It's going beyond the Listers and BCA).  If the town loses the appeal or settles for a lesser valuation, the Grand List will be significantly reduced, hence also reducing amount of taxes collected. 

By law, the Town has to remit the school taxes within 20 days of the tax due date (Oct 15).  If the appeal is resolved and the GL reduced within those 20 days, the Listers will simply adjust the Grand List and I’ll remit the corresponding dollar amount to the school.

However, if it’s resolved and the GL is reduced AFTER the 20 days (which seems likely), I know that the  Town is still obligated to remit the current GL amount to the school within the 20 days.   My question is:  if the GL is reduced after those 20 days and I’ve already remitted the money to the school, how does the Town get the Education tax dollars back to pay back the taxpayer?  Does the school have to pay it back? Does the state do it?  How does it work

Would appreciate your thoughts...

Laura