Tax Type
Local Taxes
Property Tax
Description
Lack of Notice of Real Estate Taxes Due; Application of Tax Payments
Topic
Collection of Delinquent Tax
Local Taxes Discussion
Penalties and Interest
Returns/Payments/Records
Date Issued
05-24-1988
[Opinion - Virginia Attorney General: 1988 at 536]
REQUEST BY: Mr. Bernard J. Natkin County Attorney for Rockbridge County P.O. Box 4205 Lexington, Virginia 24450
OPINION BY: Mary Sue Terry, Attorney General
OPINION:
You ask whether a purchaser of real property is liable for real estate taxes due in the year of purchase, in addition to a late penalty and interest, when the purchaser did not receive a tax bill or any other form of notice from the treasurer's office in that year. You also ask whether the local treasurer must apply real estate tax payments tendered for the current year to the most delinquent real estate taxes due and owing or may credit them to the current year's taxes.
I. Applicable Statutes
Section 58.1-3281 sets January 1 as the beginning of the tax year for the assessment of real estate taxes. This statute further provides that "the owner of real estate on that day shall be assessed for the taxes for the year beginning on that day."
Section 58.1-3912 requires the local treasurer to mail tax bills each year to the "taxpayer assessed with taxes and levies for that year."
Section 58.1-3913 mandates that
unless otherwise provided by ordinance of the governing body,1 any payment of local levies received [by the treasurer] shall be credited first against the most delinquent local account, the collection of which is not subject to a defense of an applicable statute of limitations.
1 You state that Rockbridge County has not enacted such an ordinance.
Section 58.1-3340 provides, in pertinent part:
There shall be lien on real estate for the payment of taxes and levies assessed thereon prior to any other lien or encumbrance. The lien shall continue to be such prior lien until actual payment shall have been made to the proper officer of the taxing authority. The purchaser at a sale shall see that the proceeds are applied to the payment of all taxes and levies assessed on real estate. . . . The seller's liability for taxes and levies shall be effectively prorated contractually. The words 'taxes' and 'levies' as used in this section include the penalties and interest accruing on such taxes and levies in pursuance of law.
II. Purchaser Not Relieved of Real Estate Tax Liability In Year of Purchase
A prior Opinion of this Office concludes that,
in accordance with § 58.1-3340, with or without the reissuance of a tax bill to a new owner [pursuant to § 58.1-3916], when real property is transferred after January 1 of a tax year, the real estate tax liability . . . for that year is the personal liability of the new owner and not of the January 1 assessed owner.
1986-1987 Att'y Gen. Ann. Rep. 307, 309. Another prior Opinion concludes that a taxpayer's failure to pay taxes when they are due, simply because the taxpayer did not receive a real estate tax bill, does not relieve him from the imposition of penalties and interest on the taxes owed. See 1981-1982 Att'y Gen. Ann. Rep. 393, 394. Based on the above, it is my opinion that a purchaser of real property is liable for delinquent taxes which were due in the year of the purchase, plus late penalties and interest, whether or not the purchaser received a bill for these taxes.
III. Taxes Paid for Real Estate Must Be Credited to Most Delinquent Account of Taxpayer
Section 58.1-3913 generally governs the order of application of payments of local taxes. Absent a local ordinance, § 58.1-3913 obligates a local treasurer to apply payment tendered for real property taxes to "the most delinquent local account,"2 the collection of which is not barred by the applicable statute of limitations.3 A prior Opinion of this Office, construing the substantively identical predecessor statute to § 58.1-3913, concludes that a treasurer must apply tax payments to the most delinquent account of the taxpayer.4 See 1982-1983 Att'y Gen. Ann. Rep. 517, 518.
2 The taxpayer, however, may dictate the type of tax to which payment is to be credited. See 1983-1984 Att'y Gen. Ann. Rep. 386.
3 Section 58.1-3341 establishes a twenty-year statutory period for the collection of taxes and levies on real estate.
4 In the year of purchase, § 58.1-3916 authorizes local treasurers to invalidate the tax bill sent to the January 1 owner and to reissue the bill to the new owner, making the account that of the new owner. See 1986-1987 Att'y Gen. Ann. Rep. 307.
IV. Purchaser Liable for Delinquent Real Property Taxes, Interest and Penalty for Year of Purchase; Tax Payments May Not Be Credited to Current Year's Taxes when Taxpayer Has Delinquent Account
In summary, it is my opinion that, with or without receipt of a tax bill, the purchaser of real property is liable for delinquent taxes, penalties and interest thereon owed on such property for the year of purchase. It is further my opinion that, pursuant to § 58.1-3913, a taxpayer's payments of real estate taxes must be credited to the most delinquent account of the taxpayer not barred from collection by the applicable twenty-year statute of limitations.
Attorney General's Opinion