Leaning on Past-Due Tax Bills

Loudoun Proposal Would Raise Fines

Loudoun County is considering a double-digit increase of its personal property tax fines to crack down on delinquent taxpayers and offset growing costs associated with the accounts.

At Tuesday's Loudoun County Board of Supervisors meeting, a 15 percentage point increase in the fines was formally proposed. A public hearing on the measure was tentatively scheduled for Sept. 8.

Under the proposal, residents who fail to pay their personal property taxes within 60 days of the deadline would incur a 25 percent fine. A 10 percent interest charge would also be tacked on each year. Loudoun officials estimate that at least $400,000 in additional revenue would be collected in the fiscal year that started this month.

Virginia law allows localities to impose personal property tax fines of up to 25 percent. Loudoun and Prince William counties have 10 percent penalties; Fairfax and Arlington counties impose the maximum 25 percent penalty after 30 days.

The first half of Loudoun personal property taxes was due May 5, and the second half is due Oct. 5. Prince William personal property taxes are due Oct. 5.

Loudoun County Treasurer H. Roger Zurn Jr. said the fine increase would target an estimated 10 percent of Loudoun taxpayers who fail to pay on time. Loudoun has historically maintained a 98 percent collection rate for personal property taxes and 99 percent for real estate taxes, among the highest in the state.

But personal property collections fell to 87 percent in the first six months of last year, resulting in about $5 million in outstanding personal property taxes. Zurn said that collections have since leveled off but that officials anticipate a tougher time collecting taxes from delinquent accounts this year.

"About 8 percent usually pay within six to 12 months," he said. "But we're thinking that rest of the 10 percent is going to be harder to collect from."

Zurn said he's seen an uptick in taxpayers requesting information about the tax relief program for the disabled and elderly, which is overseen by the commissioner of the revenue.

In Prince William, unlike Loudoun, Finance Director Chris Martino said officials were monitoring the county's collection rate, which has held steady over the past year, but had no plans to raise fines. Prince William's personal property collection rate is above 99 percent, and the county recently hired a contractor to track down out-of-state delinquent taxpayers.

"We have not considered a raise, and although I'll say 'Never say never,' it's never come up on our radar screen," Martino said.