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County waives minimum penalty for small tax bills

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Chaves County Treasurer Charlotte Andrade, shown here at the Aug. 17 Board of Commission meeting, says the waiver will mean that the county will receive about $4,700 less than it otherwise would off a total of about $31 million in tax collections. (Lisa Dunlap Photo)

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Chaves County has decided again this year to waive a $5 minimum late penalty on smaller bills owed so that the penalties will be capped at 5 percent of the amount due.

The Chaves County Board of Commissioners voted Aug. 17 to approve the suspension of the state code regarding minimum penalty requirements. The suspension has been granted since about 2008, according to Chaves County Treasurer Charlotte Andrade.
The decision affects about 1,000 of the 40,000 tax accounts in the county, she said.
Andrade said she proposed the resolution because the county does a good job at collecting taxes, meaning that the minimum penalty provision would bring in a relatively small amount of money. Also, the waiver keeps the penalty capped at 5 percent for smaller account holders, she said.
Commission Chair Robert Corn was the only dissenting vote. Commissioners Jeff Bilberry, James Duffey, T. Calder Ezzel Jr. and Will Cavin approved the minimum penalty waiver, which affects delinquent accounts of less than $100.
In bringing the resolution before commissioners, Andrade said that the penalty could be considered high on smaller accounts.
“If a taxpayer has a tax payment of $5, they accrue a 1 percent penalty per month up to 5 percent (for the five months past due). On a $1 tax bill, that (maximum penalty) would be 5 cents a month. If this is not OK’d, they would automatically be assessed a $5 penalty. So, you see, going from 5 cents per month up to $5 is a considerable difference,” she told commissioners.

A spreadsheet from the Treasurer’s Office showed, for example, that if a person is late on a $5 tax bill, they would pay 5 cents a month, 1 percent, for the penalty for a maximum of 25 cents after five months of delinquency with the waiver in place. Without the waiver, they would pay a minimum penalty of $5. (The penalties start again for the second half of payments due later in the year, Andrade said.)
Meanwhile, someone with $100 owing on a tax bill would also pay a penalty of $5 over five months, 1 percent or $1 a month, with or without the waiver.
She also said that the county tax collection rate during the past 10 years is 99.29 percent, so the number of delinquent accounts is few and the number of those under $100 even fewer.
“The cost that would be affected is about $4,700 based on a $31 million tax roll,” she said, “so you can see that it is very minimal based on the total tax roll we have.”
By waiving the minimum penalty of $5, smaller delinquent accounts still have to pay a penalty, but only a maximum of 5 percent of the amount due.
Corn said he was opposed to the waiver on principle.
“I am just crazy about this stuff,” he said. “When I was a judge, if you did something wrong, you owed the penalty and I didn’t waive it. And I think this is the same thing. If you owe the tax, you need to pay the tax. If you don’t pay, then you are subject to the same penalties as everybody else. Just because you have a smaller amount due, there is no variance. What’s right is right and what’s wrong is wrong.“
The approved penalty suspension affects 2017 tax payments.
Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 310, or at reporter02@rdrnews.com.