Board Action Request
One-time abatement of property tax penalty for certain taxpayers, as amended
WHEREAS, on March 16, 2020 the Chair of the County Board declared a local emergency pursuant to Minnesota Statutes 2019, Chapter 12 due to the COVID-19 pandemic; and
WHEREAS, on March 17, 2020 through Hennepin County Board Resolution 20-0118R1, the County Board declared the local emergency remained ongoing and would continue until the passage of a termination resolution by the Hennepin County Board; and
WHEREAS, Minnesota Statutes 2019, Section 279.01 subdivision 2 permits the county board, with the concurrence of the county treasurer, to delegate to the county treasurer the power to abate the penalty provided for late payment of taxes in the current year; and
WHEREAS, the County Board finds that imposition of the penalty for certain taxpayers during the declared local emergency would be unjust and unreasonable and desires to make a one-time abatement of penalty for certain taxpayers pursuant to Minnesota Statutes 2019, Section 279.01, subdivision 2.
BE IT RESOLVED, that penalty for late payment that would otherwise be imposed between May 15, 2020 and July 15, 2020 be waived for taxpayers who meet the following conditions: (1) the taxpayer’s total May 15, 2020 property tax payment for all parcels is less than $50,000; (2) the taxpayer does not escrow their property tax payment through a mortgage or escrow service; and (3) the taxes payable by May 15, 2020 are received on or before July 15, 2020; and
BE IT FURTHER RESOLVED, that in accord with this Resolution, the authority to abate penalty pursuant to Minnesota Statutes 2019, Section 279.01, subdivision 2 in response to the local emergency declared on March 16, 2020 is delegated to the County Treasurer; and
BE IT FURTHER RESOLVED, that consistent with Minnesota Statutes 2019, Section 375.192 and Hennepin County Board Resolution 95-8-556R1, any taxpayer not eligible for the abatement provided in this Resolution because the taxpayer pays property taxes in excess of $100,000 per year or makes payment by escrow may make individual application to the County Auditor to waive the penalty for late payment between May 15 and July 15; that such application should include the factual basis for waiving the penalty for late payment; that the County Auditor may require verification of information presented in the taxpayer’s application prior to granting any abatement pursuant to this paragraph; and that the County Auditor’s decision on such application is discretionary and not appealable; and
BE IT FURTHER RESOLVED that the County Administrator may take further action as he deems necessary and reasonable to mitigate the effects of this Resolution on the taxing districts within the county; and
BE IT FURTHER RESOLVED that by August 15, 2020, a summary report shall be submitted to the County Board stating the number of abatements processed pursuant to this Resolution, together with other relevant data.
The current COVID-19 pandemic has resulted in numerous job losses and financial uncertainty for taxpayers. In that context, county staff have received numerous requests to delay collection of property taxes payable on May 15, 2020. Under Minnesota law, property taxes are payable in two equal installments on May 15 and October 15 of each year, called the “first half” and “second half" payments. The county collects property taxes on behalf of all taxing districts in its boundaries and disburses the taxes following collection. If not paid by each deadline, the taxpayer immediately incurs a penalty of 2% (homestead) or 4% (non-homestead). Additional penalty is added every month for the remainder of the year until a maximum penalty of 8% (homestead) or 12% (non-homestead) is reached.
The Hennepin County Board has authority under Minn. Stat. § 279.01 to abate penalty in the current year if it finds the penalty is “unjust and unreasonable.” Section 279.01 does not require a written application from the owner and penalty abatement can be applied to a group of properties.
Taxpayers who do not qualify for the automatic abatement may make written application to the County Auditor pursuant to Minnesota Statutes, Section 375.192, which permits abatement on a case by case basis.
$567,220,176 in first half collections is expected from 209,589 tax parcels that escrow. $628,993,441 in first half collections is expected from 202,799 tax parcels with liability under $100,000 that do not escrow. $529,678,654 in first half collections is expected from 2,861 tax parcels with liability over $100,000 that do not escrow.
Current Request: Staff requests a one-time automatic abatement of penalty on the May 15, 2020 property tax payment. The automatic abatement will apply for those taxpayers whose annual payment is less than $100,000 (less than $50,000 total payable on May 15 and less than $50,000 total payable on October 15, for all of the taxpayer’s parcels) so long as they make the May 15 payment on or before July 15, 2020. Those taxpayers who pay taxes through escrow are excluded from the automatic abatement. The automatic abatement is based solely on the amount of the tax bill; it therefore applies to all properties regardless of classification.