UKS COVID-19 | EXECUTIVE ORDER 7S, PARAGRAPH 7
Pending Property Tax Appeals are Placed At Risk in Tax Deferral Program
This UKS CLIENT ALERT identifies a significant risk for taxpayers that apply for the tax deferral program that many municipalities have implemented using a State created application form under COVID19 Executive Order 7S. The risk is created by a WAIVER of pending tax appeals included in that form.
On April 1, 2020, Governor Lamont signed Executive Order (“EO”) No. 7S. In addition to a number of other directives, paragraph 6 of the order (as modified by subsequent April 7, 2020 guidance from the State Office of Policy and Management (“OPM”) and April 13, 2020 EO 7W), required municipalities to, among other things, enact a temporary program for relief from collection of property taxes, utility charges, and assessments (“Taxes”), extend certain filing deadlines for some municipal taxpayers, and suspend all non-judicial tax sales. The Order provides for other actions that were the subject of two prior UKS COVID19 alerts:
- UKS COVID-19 – Executive Order 7S | Guidance for Municipalities
- UKS COVID-19 – Executive Order 7S, Paragraph 7 | Impact on Municipal Financing
Under Order 7S, Paragraph 6, each municipality shall provide: (1) a temporary deferment of certain tax, municipal water, sewer, and electric rates, charges, and assessment collection (“Deferment Program”); and/or, (2) reduced interest on delinquent payments for certain tax, municipal water, sewer, and electric rates, charges, and assessment delinquencies (“Low Interest Rate Program”). The Deferment Program, unlike the Low Interest Rate Program, requires a showing of an adverse financial impact on the taxpayer caused by COVID-19 unless the municipality notifies the State that such a showing is not necessary because they are opening the deferral to all who apply. Here (link) is the list of municipalities and the options they have chosen under the state-mandated program. Even if the municipality has chosen to allow all taxpayers to defer ("Deferred All"), landlords are likely to be required by most municipalities to file an application showing harm from the health emergency.
The State has prepared an application form to be distributed by municipalities to taxpayers if the municipality is not opening the deferral to all or if landlords are required to apply: APPLICATION FOR MUNICIPAL/QUASI-MUNICIPAL TAX RELIEF DEFERRAL PROGRAM (“Application”). Taxpayers and Municipalities should be aware, however, that use of this form and election of the deferral program by taxpayers comes at a significant risk to parties presently engaged in, or contemplating, a tax appeal pursuant to General Statutes §§ 12-117a or 12-119. Specifically, the Application includes statements that the applicant must swear to, under oath, including that the taxpayer gives up the right to any relief regarding pending or pursued tax appeal challenge to the municipality’s assessment:
- I am aware of the amount and/or basis of the taxes, charges, and assessments that I am requesting to be deferred and I hereby irrevocably waive all rights to appeal or dispute them on any basis. I understand that the municipality’s lien, priority, and enforcement rights will remain unaffected during and after this period.
(Emphasis added.) Accordingly, any taxpayer or Municipality electing participation in the Deferral Program pursuant to EO 7S should be aware that doing so may reduce or significantly impair a taxpayer’s ability to redress and obtain relief from a challenged Tax Assessment currently pending or otherwise available in the future.
The waiver could apply to all of the years at issue in any pending appeal. That could mean five years of potential tax savings are at risk if the waiver is signed. The deferral of tax payments this July may not offset the likely loss of benefits from a pending assessment appeal. It is likely that any appeal filed with a Board of Assessment Appeals and about to be filed in court would be waived as well as those that are pending in court.
BOTTOM LINE: If you have a tax appeal pending, do not sign the application that includes the aforesaid waiver provision unless you are willing to forgo the potential benefits of your tax appeal.
If you have any questions or need assistance with regard to the Executive Order 7S or Municipal Law matters in general, please contact Robert M. DeCrescenzo, Esq., at 860.548.2625 or email@example.com or Richard D. Carella, Esq., at 860.548.2681 or firstname.lastname@example.org. You may also visit our website at: www.uks.com/services-industries/governmental/
Disclaimer: The information contained in this material is not intended to be considered legal advice and should not be acted upon as such. Because of the generality of this material, the information provided may not be applicable in all situations and should not be acted upon without legal advice based on the specific factual circumstances.