Can You Keep Your Excess Levy? Maybe…
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In a time of tax caps and delinquent property tax payments, it is rare to collect more than the certified property tax levy amount that appears on your budget order, but it does occasionally happen.
Your first instinct is to ask, “Can I keep the extra money?” Actually, it may be possible to keep at least a portion of it.
Let’s use as an example where a taxing unit that collects 101% of its 2012 certified levy when the spring and fall property tax distributions were received. This taxing unit will receive a notification from the Department of Local Government Finance (DLGF) in 2013 – usually in March — of the excess levy collection. The notice will direct the taxing unit to transfer the excess amount into its Levy Excess Fund. Later, when the taxing unit calculates its maximum levy for 2014, the 2014 levy will be reduced by the amount in the Levy Excess Fund.
If you can show that all or part of the 2012 excess is actually money you were owed due to delinquencies from prior-year taxes, you can keep it and wipe out that amount of the levy excess.
There is no formal paperwork to fill out to request keeping the excess levy. What you must do is document that this is money you were owed and didn’t collect in a previous year and share that documentation with your DLGF field representative. As an alternative, you can provide the delinquency payment documentation when you respond to your Notice of Final Budget Recommendation (commonly referred to as the 1782 Notice).
If you have questions or need help documenting the portion of excess levy your taxing unit should be allowed to retain, please contact us at footnotes@umbaugh.com.
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Information in this article was believed current as of the date of publication. As you know, changes occur frequently. The information presented is of a general educational nature. Before applying to your specific circumstances, please contact us at footnotes@umbaugh.com.