Meade County approves sale of tax certificates
Wednesday, September 4, 2019
Posted by: Carly Cahur
STURGIS — The Meade County Commission has approved a resolution that allows the county to sell tax certificates for those properties with delinquent taxes.
South Dakota state law specifically states that counties are prohibited from selling tax certificates, but counties can pass a resolution waiving that provision, which Meade County commissioners did Tuesday. Commissioners Doreen Creed, Ted Seaman, Rod Bradley, and Rich Liggett voted in favor of passing the resolution. Commissioner Talbot Wieczorek was absent.
The county had sold tax certificates prior to 2013, but when many property owners suffered damage after Winter Storm Atlas, the county halted the practice.
In July, county commissioners discussed the idea of again selling tax certificates, but they said they wanted a plan in place before they passed a resolution stating their intention.
As of Tuesday, there was $611,108.12 worth of overdue property taxes owed in Meade County.
Property taxes help fund county, city, and school budgets, and when property owners fail to pay their property taxes, it is the county’s responsibility to recoup the lost revenue.
When an individual does not pay property taxes on time, the county generates a tax sale certificate.
Beginning in October, the treasurer’s office will sell any tax sale certificate that is outstanding. Those would generally be from 2013 to 2018, said Meade County Treasurer Susan Boadwine.
Then on Dec. 16, the county will sell tax sale certificates generated when a property owner failed to pay their 2018 taxes due in 2019. Boadwine said those are from properties which have not previously generated a tax sale certificate.
So, why would someone want to buy a tax sale certificate?
When property owners are in arrears on their taxes there is a 10% penalty annually on the outstanding balance.
Once the county sells tax sale certificates to investors, the investor then holds the lien. Property owners then have an opportunity to pay the delinquent amount due, plus interest, at any time. If the lien is paid, the investor then recoups the back taxes plus interest.
But if the lien is not paid within three years from the time the sales tax certificate is generated, the investor has the right to do a tax deed on the property. The investor then becomes the owner of the property.
In addition to generating tax certificates, Boadwine has been moving forward with taking tax deed on properties. A tax deed gives the government the authority to sell the property to collect the delinquent taxes.
“Once I take that property for tax deed and we get it in the county’s name, I will let the commissioners know. It will be designated surplus property and will be auctioned off,” she said.
In the past, the county has attempted to work with property owners who are behind on paying their property taxes through a property tax payback plan. A list of individuals and payment plans revealed Tuesday showed the county has asked for as little $300 a month to bring the taxes current.
“It looks to me like we haven’t had a lot of luck with our plans and people have just been gaming the tax system,” said Seaman.
Creed said she believes it is time for the county to take action. Those who owe back taxes have been notified and need to pay the county, she said.
“If the entire county did this, we’d have to close up shop,” Creed said of non-payment of taxes.
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