Multi-Department Task Force Focuses on Business Property Tax Collection

Assessor reports $5.5 million in back taxes are yet to be collected

By Dana Trumbull

On Wednesday, 3/20, Pinal County Treasurer Mike McCord, Sheriff Mark Lamb, Business and Personal Property Supervisor Melina Lopez (Assessor’s office) and Deputy County Attorney Chris Keller  submitted a joint presentation to the Pinal County Board of Supervisors about the business personal property tax collection process. Each of the four offices represented plays a role in the collection of business taxes.

“When I took office, one of the things that became apparent to me very quickly was the way things operate in Arizona related to property taxes, both real property and business personal property,” McCord explained. “If you don’t pay your taxes on your own personal property, in February, we have a tax lien sale process to recoup that money to fund school districts, fire districts and Pinal County itself. But, when it relates to business personal property tax, it’s a different process. Our sheriff becomes involved in that process as the enforcement arm for the treasurer’s office.

“What we discovered was, at that time, there were businesses that owed close to $6 million [collective total]. We’ve worked diligently over the last two years to reduce that.”

Recognizing some of the inefficiencies that had allowed the county’s collection procedures to become lax, the Treasurer, Assessor, Sheriff and County Attorney offices worked together to form a Delinquent Tax Task Force with representatives from all offices involved. The group meets monthly to share information about where each case stands and quarterly to discuss possible upcoming property seizures. “Our goal is compliance, not enforcement,” clarified Lamb.

Notices to businesses owing back taxes (some from as early as 1989) are served a minimum of 3-4 times within a 6 month period. If a seizure becomes necessary, a representative from each of the four offices participates in order to respond to the business owners’ questions and counter the type of misinformation that has allowed owners in the past to avoid collection.

“As we started putting processes in place, I wanted to make sure that I’m protecting the people of this county and ensuring that, by the time we’re at their house, it’s because we’ve exhausted every single alternative we have,” said Lamb.

By law, the sheriff holds the authority “to seize, advertise/notice and sell as much personal property assets owned to run the business [such as machinery, supplies and manufactured homes] as necessary to pay the taxes, interest and costs of sale” at auction; however, even with the sheriff on the doorstep, the business owner is given the opportunity and encouraged to pay the back taxes rather than having assets seized. In the two cases cited for 2017/18, this is exactly what occurred, with the taxpayers paying the outstanding balances owed within four hours of seizure and reopening for business “before lunchtime.” The amount collected between these two cases was $749,085.

During the same year, the total amount of back taxes paid (including seizures) after the tax force began the notification process exceeded $1 million, as business owners began to realize that the county is taking collections seriously. An additional $73,074 was collected without service efforts.

With approximately 4,100 active businesses in the county, 149 are delinquent on taxes – most for multiple years. Between active and inactive accounts, the assessor’s office reports an outstanding balance of $5,552,426 yet to be collected. This amount includes 16% annual interest accrued on the accounts.

“I would hope that they would reach out and work toward getting these taxes paid, so that we can avoid having to step up and collect those taxes or affect anybody’s livelihood,” commented Lamb.

At this time, state law does not provide for business owners to make payments on property taxes; they must be paid in full. Members of the task force, however, are working with legislators to try to get this changed.

In addition to the presentation to the Board of Supervisors, the task force is working on educating the business community through presentations to local Chambers of Commerce and a video that will be posted on Facebook.

Business property taxes help to fund school districts, towns/cities, colleges, the county general fund and irrigation, fire, water and library districts.

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