Penalty and Interest on Failure to File Return or Pay Revenue Held in Trust for State; Penalty and Interest on Willful Failure to Pay Ad Valorem Tax; Distribution of Penalties and Interest

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  2. Georgia Code
  3. Revenue and Taxation
  4. State Administrative Organization, Administration, and Enforcement
  5. Administration
  6. Penalty and Interest on Failure to File Return or Pay Revenue Held in Trust for State; Penalty and Interest on Willful Failure to Pay Ad Valorem Tax; Distribution of Penalties and Interest

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  1. In any instance in which any person willfully fails to file a report, return, or other information required by law or willfully fails to pay the commissioner any revenue held in trust for the state, such person shall pay, in the absence of a specific statutory civil penalty for the failure, a penalty of 10 percent of the amount of revenue held in trust and not paid on or before the time prescribed by law, together with interest on the principal amount at the rate specified in Code Section 48-2-40 from the date the return should have been filed or the revenue held in trust should have been remitted until it is paid.
    1. In any instance in which any person willfully fails, on or after July 1, 1981, to pay, within 120 days of the date when due, any ad valorem tax owed the state or any local government, such person shall pay, in the absence of a specific statutory civil penalty for the failure, a penalty of 5 percent of the amount of tax due and not paid at the time such penalty is assessed, together with interest as specified by law. After 120 days from the imposition of the initial penalty, an additional penalty of 5 percent of any tax amount remaining due shall be imposed, together with interest as specified by law. If any tax amount remains due after 120 days from the imposition of such additional penalty, a penalty of 5 percent shall be imposed, together with interest as specified by law. Should any tax amount remain due 120 days after such date, a penalty of 5 percent shall be imposed, together with interest as specified by law. The aggregate amount of penalties imposed pursuant to this subsection shall not exceed an amount equal to 20 percent of the principal amount of the tax originally due. These penalties shall not, however, apply in the case of:
      1. Ad valorem taxes of $500.00 or less on homestead property as defined in Part 1 of Article 2 of Chapter 5 of this title; or
      2. With respect to tax year 1986 and future tax years, ad valorem taxes of any amount on homestead property as defined in Part 1 of Article 2 of Chapter 5 of this title, if the homestead property was during the tax year acquired by a new owner who did not receive a tax bill for the tax year and who immediately before acquiring the homestead property resided outside the State of Georgia and if the taxes are paid within one year following the due date.
    2. Any city or county authorized as of April 22, 1981, by statute or constitutional amendment to receive a penalty of greater than 10 percent for failure to pay an ad valorem tax is authorized to continue to receive that amount.
    3. With respect to all penalties and interest received by the tax commissioner on or after July 1, 1998, unless otherwise specifically provided for by general law, the tax commissioner shall distribute penalties collected and interest collected or earned as follows:
      1. Penalties collected for failure to pay ad valorem taxes attributable to the Board of Education or independent school district shall be paid into the county treasury in the same manner and at the same time the tax is collected and distributed to the county, and they shall remain the property of the county;
      2. Interest earned by the tax commissioner on taxes collected but not yet disbursed shall be distributed pro rata based on each taxing jurisdiction's share of the total amount upon which the interest was computed; and
      3. Except as otherwise provided in subparagraph (A) of this paragraph, penalties collected for failure to return property for ad valorem taxation or failure to pay ad valorem taxes, and interest collected on delinquent ad valorem taxes, shall be distributed pro rata based on each taxing jurisdiction's share of the total tax on which the penalty or interest was computed.

(Ga. L. 1937-38, Ex. Sess., p. 77, § 38; Code 1933, § 91A-239.1, enacted by Ga. L. 1979, p. 5, § 10; Ga. L. 1980, p. 10, § 3; Ga. L. 1981, p. 1857, § 5; Ga. L. 1986, p. 1322, § 1; Ga. L. 1998, p. 1120, § 1; Ga. L. 1999, p. 81, § 48; Ga. L. 2015, p. 1219, § 4/HB 202; Ga. L. 2016, p. 574, § 4/HB 960.)

The 2015 amendment, effective January 1, 2016, substituted "such person shall pay" for "he shall pay" in subsection (a) and the introductory language of paragraph (b)(1); and substituted "at the time such penalty is assessed" for "on or before the time prescribed by law" in the first sentence of the introductory language of paragraph (b)(1).

The 2016 amendment, effective July 1, 2016, substituted the present provisions of the introductory paragraph of paragraph (b)(1) for the former provisions, which read: "In any instance in which any person willfully fails, on or after July 1, 1981, to pay, within 90 days of the date when due, any ad valorem tax owed the state or any local government, such person shall pay, in the absence of a specific statutory civil penalty for the failure, a penalty of 10 percent of the amount of tax due and not paid at the time such penalty is assessed, together with interest as specified by law. This 10 percent penalty shall not, however, apply in the case of:"; substituted the present provisions of subparagraph (b)(3)(A) for the former provisions, which read: "Penalties collected for failure to return property for ad valorem taxation or for failure to pay ad valorem taxes, and interest earned by the tax commissioner on taxes collected but not yet disbursed, shall be paid into the county treasury in the same manner and at the same time the tax is collected and distributed to the county, and they shall remain the property of the county; and"; added subparagraph (b)(3)(B); redesignated former subparagraph (b)(3)(B) as present subparagraph (b)(3)(C); and substituted the present provisions of subparagraph (b)(3)(C) for the former provision, which read: "Interest collected on delinquent ad valorem taxes shall be distributed pro rata based on each taxing jurisdiction's share of the total tax on which the interest was computed." See Editor's notes for applicability.

Editor's notes.

- Ga. L. 2016, p. 574, § 6(b)/HB 960, not codified by the General Assembly, provides: "The new penalty and interest rates provided in Sections 2, 3, and 4 of this Act shall apply to penalties and interest accrued on or after the effective date of this Act." This Act became effective July 1, 2016.

JUDICIAL DECISIONS

Cited in Averett v. Troup County, 219 Ga. App. 74, 464 S.E.2d 32 (1995).

OPINIONS OF THE ATTORNEY GENERAL

Penalty provided in subsection (b) of O.C.G.A. § 48-2-44 is automatic and mandatory, and must be imposed whenever conditions set forth are satisfied. 1981 Op. Att'y Gen. No. 81-86.

Penalty and execution fee cumulative.

- If circumstances set forth in each section are met, the penalty provided by subsection (b) of O.C.G.A. § 48-2-44 and the execution fee provided by O.C.G.A. § 48-5-161(c) are cumulative in nature. 1982 Op. Att'y Gen. No. U82-37.

Penalty provided in subsection (b) of O.C.G.A. § 48-2-44 applies to all state and local ad valorem property taxes, except when the original tax due is $500.00 or less and is on homestead property as defined in O.C.G.A. Art. 2, Ch. 5, T. 48. The penalty applies to no other taxes. 1981 Op. Att'y Gen. No. 81-86.

Applicability of penalty provisions.

- Penalty and fees provided in O.C.G.A. §§ 48-2-44 and48-5-161 would apply to unpaid ad valorem taxes which were assessed in 1981, 1982, and 1983 as follows: When the statutory prerequisites of O.C.G.A. § 48-2-44 have been met, a penalty of 10 percent of the amount of tax due and not timely paid would apply to ad valorem taxes which were unpaid after July 1, 1981. In addition, a 10 percent execution fee would apply to ad valorem tax executions issued on or after July 1, 1982 and before March 15, 1983. In keeping with the reasoning employed in Ops. Att'y Gen. 81-76 and 82-72, only those executions issued on or after March 15, 1983, the effective date of O.C.G.A. § 48-5-161, as amended by Ga. L. 1983, p. 575, would not be subject to a 10 percent execution fee, but the amount collected on these executions would include all costs, commissions, interest, and penalties as provided by law. 1984 Op. Att'y Gen. No. U84-25.

Local school systems are entitled to a proportionate share of funds raised through imposition of the penalty specified in subsection (b) of O.C.G.A. § 48-2-44. 1983 Op. Att'y Gen. No. 83-20.

Subsection (b) of O.C.G.A. § 48-2-44 does not penalize nonpayment of taxes which became due more than 90 days prior to July 1, 1981, because that subsection connects failure to pay on or after July 1, 1981, with a requirement that the tax be paid within 90 days of the due date. 1981 Op. Att'y Gen. No. 81-86.

Part-payments between due date and penalty date (90 days after due date) do not affect the penalty because the penalty provided in subsection (b) of O.C.G.A. § 48-2-44 is calculated based upon the amount of tax not paid when due. 1981 Op. Att'y Gen. No. 81-86.

Protection from penalty for taxes owed on homestead.

- Municipality of Thunderbolt may not collect the penalty imposed by O.C.G.A. § 48-2-44 for failure to pay taxes of $500.00 or less on homestead property. 1987 Op. Att'y Gen. No. U87-15.

Accruing interest on unpaid estate taxes.

- Unpaid tax begins bearing interest from the date the return was filed or as of the last date provided for filing the return, if no return was submitted; this interest continued to accrue until settlement, unless an execution was issued pursuant to former Code 1933, § 92-3404 (see now O.C.G.A. § 48-12-6). 1970 Op. Att'y Gen. No. 70-139.

RESEARCH REFERENCES

Am. Jur. 2d.

- 72 Am. Jur. 2d, State and Local Taxation, § 738 et seq.

C.J.S.

- 85 C.J.S., Taxation, § 1712 et seq.

ALR.

- Business situs of intangibles in state other than domicile of owner as excluding tax at domicile, 79 A.L.R. 344.

Liability to penalty imposed for failure to pay tax of one who in good faith contested its validity, 96 A.L.R. 925; 147 A.L.R. 142.

Penalty for nonpayment of taxes when due as affected by lack of notice to taxpayer, 102 A.L.R. 405.

Constitutionality of legislation prescribing rate of interest or penalty for nonpayment of taxes, or the conditions liability in that regard, operative only in certain political subdivisions, 111 A.L.R. 1354.

Doubt as to liability for, or as to person to whom to pay, tax, as affecting liability for penalties and interest, 137 A.L.R. 306.


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