As Wright County and the rest
of the world continues to try to get back to business as usual, some things
remain in place and on schedule, among those being first-half property tax payments
– which are due by Friday, May 15.
Last month, Wright County
agreed to assist those who are struggling to make ends meet due to many
businesses being shut down or limited in their operations by reducing the
penalty for late tax payments to 1 percent. While some counties are charging no
penalty, Wright County Auditor/Treasurer Bob Hiivala said the 1 percent penalty
may be enough to get those who can make their payments on time to do so because
many cities and school districts rely on the first-half tax payments to keep their
cash flow available.
“We are in charge of the
penalty rate,” Hiivala said. “Wright County recognized the importance of
collecting taxes on behalf of the municipalities. Therefore, we lessened the
penalty rate down to 1 percent regardless of the class rate. Commercial
property pays a higher penalty rate than residential. If you paid your
residential property tax late, you were charged a 2 percent penalty. We kept
the rate at 1 percent through the end of May and all of June.”
After June 30, the penalty
rate will increase to 2 percent and, after July 31, the rate will revert to
state guidelines for each classification – as high as an 8 percent penalty.
Hiivala said there are
concerns that some will simply delay paying their property taxes because of the
low penalty rate, but added that those that aren’t feeling an immediate
hardship are likely to make their payments as usual.
“There are concerns for
short-term cash flow purposes, but chances are if you own a piece of property,
you’re probably not going to let it go tax forfeit,” Hiivala said. “Almost
everyone will pay the taxes eventually. In order to encourage as many on-time
payments as we could, that’s why we said there would be a penalty. If you’re a
business owner and you can save $300 by paying on time, most will do that. But,
if you’re in a situation where you really can’t pay it, we didn’t want to
penalize you without setting a precedent. We didn’t want to penalize you out of
your property.”
One advantage the county has
in order to get the majority of property tax payments in on time is that many
mortgages and lease agreements include property taxes as part of their monthly
payments.
“Countywide, about 40 percent
of our parcels are escrowed,” Hiivala said. “We’ll get those payments in on time.
It’s only 40 percent of the total, but it’s a good base number of parcels to
start with, along with those who plan to pay on time anyway.”
Many choose to make their
payments in person at the Auditor/Treasurer’s office in the Wright County Government
Center. While technically that is still possible via drop boxes, Hiivala points
out that there are alternative payment options with the customer windows closed
to the public.
“There are still methods to
pay property taxes without the public counters being open,” Hiivala said. “You
can still mail your tax payment into us. You can go on the county website and
pay us electronically, but there is a small fee to do that. We also have drop
boxes set up outside our office for those who want to make their payments directly
to us at the Government Center.”
It is unclear how many people
will temporarily go delinquent when Friday’s first-half property tax deadline
comes and goes, but Hiivala said he is confident that the vast majority of
property taxes will be collected – just some later than usual.
“These are unprecedented
times,” Hiivala said. “We understand that a lot of people are facing financial
difficulties. We hope this change to our system will allow those people to have
the opportunity to pay their taxes when they’re better equipped to do so. We
expect to collect almost all of the taxes that are due, just not all on May
15.”