Exemptions dropped after a deed change

We get it that the Homeowner and Senior Citizen Exemptions are supposed to roll over automatically from one year to the next. For whatever reason, the rollover sometimes does not always work so well and exemptions that were supposed to roll over get dropped.  

Unfortunately, the taxpayer will not find out about a dropped exemption until the second Installment property tax bill hits their mailbox. Assuming that the taxpayer spots the dropped exemption we at the Assessor office can file a certificate of error and get an amended tax bill or a refund for the tax payer.

But, because of a new law, we need to get away from relying on certificates of error. To do so we need to avoid the error in the first place. So we are asking everyone who has had any kind of ownership or deed change or activity to contact us at the proper time to apply for or confirm exemptions. The proper time will not be today. Our plan is to process the 2021 (remember – the tax year is one year behind the calendar year) exemptions around March 1, 2022. Our procedure at the proper time will be modified to correspond to the then current Covid status. When it is time to begin processing the 2021 exemptions we will send an email to our email notification list.  

 The new law

A tax bill is based upon the value of the property (modified) multiplied by a tax rate. Divide the total of the levies within a tax district by the total of the property values within the same tax district to figure the tax rate. Once this math is done all of the tax bills within the tax district can be printed and mailed. But, sometimes taxpayers do not receive on their tax bill an exemption to which they were entitled. So at the Assessor office we file a certificate of error. The tax payer then receives an amended bill or a refund.

The problem with the certificate of error procedure is that the dollar value of that certificate of error was not included in the original math that determined the tax rate.

The amount of that certificate of error refund is deducted from the taxing agencies’ then current tax receipts. The agencies say “hey – this refund amount was not included in calculating the tax rate and it’s not our fault there is an error and we are not given the opportunity to recover the amount that we are refunding out today.”   

The new law now allows agencies to re-tax those certificate of error amounts that they have refunded to taxpayers. It is the administration of this re-tax law that concerns me. We can go back three years with certificates of error. This law also applies to PTAB refunds, which can come four years after the tax year. I have no idea how large the re-tax amounts might be but I do know that there are a lot of certificates of error out there.   

I also know more questions than answers. I know that in 2024, for example, we might be getting a re-tax bill of one kind or another for 2021, and/or a re-tax bill for 2022, and/or a re-tax bill for 2023, for property taxes that we thought we were done with. What I do not know is how the re-tax will be presented to the tax payers.

In theory, for each agency on the tax bill we could see a line item for three separate years of certificates of error and for three or four separate years of PTAB refunds. Or, to make it simple, could we see an un-defined, un-itemized, re-tax estimate of x% tacked on to a tax bill without explanation?

To control the re-tax as much as is possible we will need to work together really hard to get every possible exemption filed on time. Every exemption filed on time will avoid a certificate of error and will therefore avoid being re taxed years later.