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Friday, September 2, 2011

Changes to the Florida Property Tax Appeal System - Time and Cost Management

Creation of Florida Statute 194.014

The State of Florida provides property owners the right to appeal their real estate property tax assessments each year by filing petitions with their county's Value Adjustment Board ("VAB").  The time County VAB's take to complete the appeal process varies, but has dramatically increased in recent years due in part to the following factors:
  • Growing number of petitions;
  • Recent changes in state law and administrative rules; and
  • involvement of property tax representatives such as the Property Tax Appeal Group
In order to change this trend of County VAB's taking longer to complete the property tax appeals each year, the Florida Legislature directed the Office of Program Policy Analysis & Government Accountability ("OPPAGA") to review the Value Adjustment Board process and answer the following four (4) questions:
  1. What is the role of value adjustment boards?
  2. What factors affect the length of the value adjustment board process?
  3. What costs are associated with the value adjustment board process?
  4. What options could the Legislature consider to modify the value adjustment board process?
The OPPAGA published results in their December, 2010 Report No. 10-64.  Within which, the OPPAGA recommends that if the Legislature wishes to make additional changes to the Value Adjustment Board process, it could consider options to:
  1. shorten the process;
  2. address costs and other fiscal implications; and
  3. increase accountability
As a result of the OPPAGA findings, the Florida Legislature drafted and recently passed the following Florida Statute:

1194.014 Partial payment of ad valorem taxes; proceedings before value adjustment board.
(1)(a) A petitioner before the value adjustment board who challenges the assessed value of property must pay all of the non-ad valorem assessments and make a partial payment of at least 75 percent of the ad valorem taxes, less the applicable discount under s. 197.162, before the taxes become delinquent pursuant to s. 197.333.
(b)1. A petitioner before the value adjustment board who challenges the denial of a classification or exemption, or the assessment based on an argument that the property was not substantially complete as of January 1, must pay all of the non-ad valorem assessments and the amount of the tax which the taxpayer admits in good faith to be owing, less the applicable discount under s. 197.162, before the taxes become delinquent pursuant to s. 197.333.
2. If the value adjustment board determines that the amount of the tax that the taxpayer has admitted to be owing pursuant to this paragraph is grossly disproportionate to the amount of the tax found to be due and that the taxpayer’s admission was not made in good faith, the tax collector must collect a penalty at the rate of 10 percent of the deficiency per year from the date the taxes became delinquent pursuant to s. 197.333.
(c) The value adjustment board must deny the petition by written decision by April 20 if the petitioner fails to make the payment required by this subsection. The clerk, upon issuance of the decision, shall, on a form provided by the Department of Revenue, notify by first-class mail each taxpayer, the property appraiser, and the department of the decision of the board.
(2) If the value adjustment board determines that the petitioner owes ad valorem taxes in excess of the amount paid, the unpaid amount accrues interest at the rate of 12 percent per year from the date the taxes became delinquent pursuant to s. 197.333 until the unpaid amount is paid. If the value adjustment board determines that a refund is due, the overpaid amount accrues interest at the rate of 12 percent per year from the date the taxes became delinquent pursuant to s. 197.333 until a refund is paid. Interest does not accrue on amounts paid in excess of 100 percent of the current taxes due as provided on the tax notice issued pursuant to s. 197.322.
(3) This section does not apply to petitions for ad valorem tax deferrals pursuant to chapter 197.

History.s. 1, ch. 2011-181.
1Note.Section 4, ch. 2011-181, provides that “[t]his act shall take effect July 1, 2011, and shall apply to petitions filed with value adjustment boards on or after July 1, 2011.”

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