Questions and Answers

Identifying Information:Property Tax interest rates for Calendar Year 2000
Tax Type:Property Tax
Brief Description:Interest rates to be paid by counties during calendar year 2000 and associated questions and answers.
Keywords:
Approval Date:10/04/1999



Body:
Division of Property Valuation

TO: All County Treasurers and County Appraisers

FROM: Laura E. Johnson, Deputy Director

DATE: October 4, 1999

SUBJECT: Property Tax Interest Rates for Calendar Year 2000

Please recall in that 1997, the legislature adopted a new law that had two major components. First, it required counties to pay interest to taxpayers. Second, it tied the interest rate the counties pay and collect to an interest rate set forth in the Internal Revenue Code (IRC) as of a specific date. Various statutes provide for some percentage point adjustments to the federal rate. For property tax purposes, the interest rates for calendar year 2000 are the same as 1999:

Calendar Year 2000
(Same as 1999)
Interest Rate Applied When a County Collects Interest:

Taxpayer’s late payment of real or personal property taxes: 11%

Interest Rate Applied When a County Pays Interest on Refunds:

Payment under protests and “equalization” appeals 7%
Tax grievance/clerical error refunds ordered by BOTA 7%
Clerical error refunds ordered by the county 9%

You should also be aware of two Board of Tax Appeals (BOTA) decisions that were issued this year pertaining to the new interest laws:

The Board has ruled that when refunds are issued on or after July 1, 1997, as the result of a clerical error, interest should be paid to the taxpayer back from the date the applicant paid the taxes. (See, e.g., In the Matter of the Application of Reynolds, Ernest and Darlene, for Relief from a Tax Grievance in Atchison County, Kansas, Docket No. 97-3542-TG, Kansas Board of Tax Appeals Docket No. 97-3542-TG, November 6, 1997).

The Board of Tax Appeals has held that interest is not paid on refunds ordered as the result of a taxpayer’s request to reduce or abate personal property penalties on the basis of excusable neglect. (See, e.g., In the Matter of the Application of Cross, Jerry/Cross Service for Relief from a Tax Grievance in Barton County, Kansas, Board of Tax Appeals Docket No. 97-4953-TG, October 15, 1997).

Finally, below is a recapitulation of some commonly asked questions with answers:

1. Question: Does the Board of Tax Appeals or a Court have to order interest before a county is required to pay it on a refund?
2. Question: Is interest paid when a refund of delinquent taxes is made?

Answer: No. The law (K.S.A. 79-2005(l)(2)) states that no interest shall be allowed where the tax paid under protest was inclusive of delinquent taxes.

3. Question: Is interest paid on a refund of personal property penalties made because the Board of Tax Appeals abated the penalty on the basis of excusable neglect?

Answer: No. See Board of Tax Appeals Docket No. 97-4953-TG, and the summary of the case in this memorandum.

4. Question: Is interest paid on (1) a payment under protest appeal or (2) an “equalization” appeal if the appeal is commenced before July 1, 1997?

Answer: No. Specific language in K.S.A. 79-2005(l) provides that interest is only paid on refunds associated with valuation appeals that are commenced after the effective date of the new law: July 1, 1997.

5. Question: Is interest paid on a payment under protest when a refund is issued as the result of a informal meeting with the county appraiser?

Answer: Yes, see the language in K.S.A. 79-2005(a).

6. Question: Can interest be reduced or eliminated?

Answer: Yes, if the Kansas Board of Tax Appeals or a court of competent jurisdiction orders the interest reduced upon a finding that an unreasonable delay was caused by the taxpayer. (K.S.A. 79-2005(l)).



Date Composed: 10/08/1999 Date Modified: 10/11/2001