County targeting delinquent taxpayers, plans to garnish S.C. tax refunds

cconley@islandpacket.comJune 25, 2013 

Beaufort County plans to garnish the South Carolina income tax returns of residents seriously behind on their property taxes.

Initially, the program will target owners of mobile homes, which have the lowest "collection ratio" of any type of property in Beaufort County, according to Treasurer Doug Henderson.

He's optimistic the effort will improve collections on nearly 4,000 mobile home owners that together owe the county about $770,000 in back taxes.

The effort also could remove from tax rolls mobile homes that have been sold, junked or moved to another county.

"We have them sitting there in receivables, and we need to get them cleaned up," Henderson said. "I don't want to spend employee time pursuing something that doesn't exist."

The county auctions away many properties for which taxes have not been paid each October. To reclaim a home or land sold at auction, the original property owner must pay off the debt, plus interest, within a year.

Each year, about 1,000 properties with back taxes are brought to the county's delinquent tax sale, but only a handful are mobile homes. The main reason, Henderson said, is that many are unlikely to attract bidders because they are old and decaying, and the county does not want the liability that comes with outright ownership should the taxes remain unpaid.

Over the years, some of these property owners have simply stopped paying even a portion of their taxes, realizing the county had few effective ways to go after them, Henderson said.

"We feel this is the only avenue available to us," Henderson said of garnishment, which is legal under the state's Setoff Debt Collection Act.

Taxpayers in jeopardy of having their state tax refund garnished will be notified by mail in June. In other counties, about half of the property owners who receive the letter pay off their debts before income tax season, Henderson said.

A spokeswoman for the S.C. Department of Revenue was not immediately sure how many counties have similar refund garnishment provisions.

Although the program likely will begin with mobile homes, Henderson says it could be expanded next year to include boats or other personal property.

"This is the first step. Next year, if program works as we think it will, we'll take on another aspect," he said.

Meanwhile, county officials on Tuesday announced a new program aimed at encouraging residents to report "tax-exemption fraud."

Under state law, owner-occupied homes do not pay for school operations, resulting in lower tax rates on these properties than on rental properties or vacation homes.

The effort is intended to make sure people who claim owner-occupied exemptions actually live in their homes, according to county spokeswoman Joy Nelson.

"When someone is receiving an exemption to which he or she is not entitled, law-abiding property owners must make up the difference in lost tax revenue by paying higher taxes," she said.

These reports can be made by calling the assessor's office at 843-255-2400.

Follow reporter Casey Conley at twitter.com/IPBG_Casey.

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