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A vendor the town hired was supposed to send out tax bills. A computer glitch resulted in over 1000 taxpayers not getting bills. Board members differ on whether state law allows tax penalties to be waived. I disagreed with decision
The Greenburgh Town Board did not approve my request that penalties be reduced or waived for Greenburgh taxpayers that paid their taxes late because they did not receive a tax bill in the mail due to a computer glitch caused by the vendor the town hired. I am extremely disappointed in the decision. As a result, those who are late in paying their tax bills will continue to see their penalties increase each month unless the bill is paid in full. The penalty increases on August 1.
There is an honest disagreement among Board members as to whether state law allows local governments to waive penalties. The Town Attorney and I believe that the Town Board has the legal authority to waive penalties if we pass a resolution stating that the waiver is in the best interest of the town. I pointed out that we always sent taxpayers bills in the mail, people relied on the bills which they did not receive. And that a vendor hired by the town (an agent of the town) made a computer glitch mistake causing over 1000 taxpayers not to receive their bills. I believe that since the error was made by an agent of the town that it would have been in the best interests of the town to waive or reduce the penalties. Taxpayers complained to me about a 5% penalty.
Other Town Board members read the law more conservatively than the Town Attorney or myself. Councilman Francis Sheehan, Diana Juettner and Gina Jackson believe that NYS law does not allow waivers of penalties. They shared RPTL 922 which states that taxpayers are responsible for paying taxes whether they receive bills or not. Councilman Ken Jones recused himself from voting since he had to pay a late fee himself.
I have asked the Town Attorney to investigate whether we have any action against the vendor we hired (if he was responsible for the computer glitch). We paid the vendor to mail out bills which did not happen. I have also asked the Town Attorney to seek a formal legal opinion from the NYS Comptroller –asking for an updated opinion on whether the Town Board has any flexibility waiving or reducing excessive penalties. An updated opinion could provide guidance to municipal officials from around the state.
Going forward the town will order signs reminding taxpayers that taxes must be paid by the end of September, January and April when we collect school taxes (Jan & September) and county, town and fire district taxes (April). Hopefully, this will remind everyone to pay their bills on time and avoid penalties. The signs will be placed at key locations around town. I am very sorry for all the aggravation so many taxpayers have experienced as a result of the computer glitch.
Greenburgh Town Supervisor
This is the link to the Town Board discussion yesterday on penalty waivers
FROM COUNCILMAN FRANCIS SHEEHAN:
THIS IS THE LINK TO RPTL 922. 922(3) IS AT THE END OF THE PAGE.
This is Section 922(3) referenced in the State Comptroller’s Opinion.
Memo from town Attorney Tim Lewis indicating that he believes that the Town Board has the ability to waive penalties. I agree with the Town Attorney.
M E M O R A N D U M
TO: Paul J. Feiner, Supervisor
Town Council Members
FROM: Timothy W. Lewis, Town Attorney
DATE: July 19, 2021
RE: Waiver of Interest and Penalties on Late Tax Payments
WARNING: This memorandum and all attachments represent attorney/client communication and/or work-product and consequently may contain information that is privileged, confidential and/or exempt from disclosure.
Can a governing body such as a NYS Town waive interest and penalties for late tax payments?
Yes, a Town, or any other governing body, can waive interest and penalties for late tax payments so long as the governing body of the municipality determines that it is in the best interests of the tax district to do so. §1182 of the Real Property Tax Law clearly states this in unambiguous terms:
§1182 Cancellation or reduction of interest, penalties and other charges
If the governing body of any tax district shall determine that it is for the best interests of the tax district, it shall have the power, by resolution, to authorize the enforcing officer to permit the cancellation in whole or in part of any interest, penalties or other charges imposed by law to which the tax district or any other municipal corporation shall be lawfully entitled; provided, however, that in cases where such interest, penalties, or other charges, if collected by the tax district, belong to a municipal corporation therein, no reduction or remission in whole or in part of such interest, penalties, or other charges shall be made without the consent of the municipal corporation affected, which consent may be given by resolution adopted after a public hearing.
Not only is the law crystal clear on this issue but the Town has relied upon this legal provision in the past in waiving interest and penalties for properties developed for affordable housing such as 112 North Lawn Avenue (SHORE-1/22/20) and 770 Saw Mill River Road (Ardsley Housing Development Fund-11/14/2007). The only requirement on the part of the municipality is that it adopt a Resolution authorizing the tax collector to cancel interest and penalties, in whole or in part, and that interest and penalties owed to other municipalities not be cancelled without their consent. Indeed, if the Town could never waive interest and penalties under any circumstances, it could not even correct penalties from a billing mistake resulting from no fault of a taxpayer.
Some may conflate the issue of whether a governing body is “authorized” to waive interest and penalties with whether a municipality is “prohibited” from waiving interest and penalties. The opinion stated here is that the Town Board is not prohibited from waiving interest and penalties but is only authorized to do so if it (1) adopts a Resolution and (2) articulates in that Resolution the reasons why it believes waiver of penalties, in whole or in part, is in the best interests of the Town. If the Town Board does not believe waiver is appropriate or in the best interests of the Town, it should simply not adopt such a Resolution but it is not prohibited from doing so.
Furthermore, the 1967 Opinion of the New York State Comptroller cited by John Kelly of the Office of the State Comptroller and provided by Tax Receiver Ann Povella is inapplicable. The Opinion, aside from being remote, relates to a tax payment that was alleged to have been “lost in the mail” which is different than the instant case where it is acknowledged that some tax bills were never mailed. Chapter 602 of the Laws of 1993 made comprehensive revisions to the provisions of Articles 10, 11 and 14 of the Real Property Tax Law in relation to the procedures for enforcing delinquent property taxes. Moreover, the 1967 Opinion correctly states that “where the tax statement, timely mailed, was not delivered because of misdirection by the post office, penalty for late payment cannot be waived by the collector” Op. State Compt.67-830. In the instant case, however, the question is not whether the penalty can be waived by the tax collector but whether §1182 authorizes the penalty to be waived by the governing body, the Town Board.
To be clear, the failure of a governing body to mail any such tax statement, or the failure of any such owner to receive the same, does not in any way affect the validity of the taxes owed or interest prescribed by law with respect thereto. 6 Op.Counsel SBEA No. 28 (N.Y.Bd.Equal. & Ass.).
Nevertheless, under certain circumstances, §1182 authorizes a “tax district”, including a village, to cancel, in whole or in part, interest, penalties or other “charges” imposed by law. See Opn. St Comp, 1997 No. 97-3 (N.Y.St.Cptr.), Robert W. Spencer, Esq., Village Attorney of the Village of Elmsford.