How unpaid property tax is collected

How Unpaid Property Tax Is Collected

KINGSPORT, Tenn. - The City of Kingsport is facing a budget crunch.

To help make ends meet, the Board of Mayor and Aldermen is considering a property tax increase.

But what about property taxes that don't get paid? Is it a big problem? We took a look at how Kingsport collects the money they are owed.

Sometimes a story up being a bit of a surprise -- it turns out this was one of them. We fully expected there to be a concern over delinquent property taxes in the Model City.

As it happens, there is no need to worry according to city attorney Joe May. "We've collected well over 99 percent of all taxes that have been billed that still remain on the books," he said. "That's about normal.

City delinquent tax attorney Joe May says there is not a rash of people dodging their tax obligation; rather, the majority of people who owe taxes to the city have those taxes sneak up. "We have an older population, and it's surprising to many people who recognize that they haven't paid taxes themselves for 30 years," he said.

That's because your mortgage company holds your property tax in escrow. Once that mortgage is paid off, the tax becomes your responsibility, and Kingsport makes sure you know about it. "We have had a very stringent collection process for quite a number of years," May said. "Each taxpayer receives a quarterly notice of their taxes."

If those taxes do go to collection, May says his office sends two notification letters as well. Even then, a person or business owing property tax still has time to pay. "They don't even come to the delinquent tax attorney by statute for two years," May said. 

May says delinquent taxes are more of a bookkeeping issue than a physical money problem; but at some point, it does become an issue for city leaders.

We took a look at the 551-page Kingsport budget document for 2013-2014. It says the city brings in upwards of $60 million in tax revenue.

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