The Township Council passed a resolution giving the option to residents of delaying payment on their second quarter property tax bill without accruing an interest penalty, in order to ease their financial burden during the COVID-19 pandemic . Mayor James Damiano presented the resolution, which would fix the interest rate for delinquent property taxes to zero percent. Residents would need to pay their property tax bill by a later due date if they wished to pay without any retroactive accrued interest.
"It will fix it to zero percent until a new resolution is passed, which then modifies the interest back to either what it previously was or within the state guidelines," said Damiano, adding that presently, the municipality has the interest rate at the maximum rate permitted by the state, which is 8 percent on the first $1,500 and 18 percent on any amount over $1,500 that is delinquent.
"What this resolution does is fix a zero percent interest rate on the entire payment for this next quarter until the council adopts a resolution that modifies the interest rate," he added.
Damiano emphasized that once the new resolution is passed fixing a new interest rate, if residents have not made their tax payment by that due date, the new resolution establishing the new rate would result in an assessed interest retroactive to the original due date on the tax payment effective to May 1. It will also continue through the second quarter, every three months and after through normal tax due dates.
"For example, if you are unable to make the May 1 tax statement or some day further out, you will be assessed a zero percent interest rate on that amount owed," he explained. "However, if the pandemic is over and assuming that by July 1 there was a council meeting and a new resolution passed re-establishing the interest rate and residents have not made their payment by that date, the entire amount of interest would be assessed as if the prior resolution had never been passed in the first place. The interest accrued would be retroactive to May 1."
He added that a deferred interest accrual for property taxes in the Township was previously done by the local finance board in the past stemming from the World Trade Center terrorist attacks in 2001. Following the attacks, local finance boards in the state allowed similar zero percent interest rates that were fixed for a period of time in the municipalities.
"While we cannot delay the time that you owe your taxes, there will not be a penalty assessed by this municipality for a late payment until a new resolution is passed," he said. "We would need to look at the situation in July to make that determination for a new resolution issuing a new due date to make sure that residents have enough time to have their payments in by then."
Council President Anthony Sgobba also agreed and said the Township Council is in support of the resolution.
"The council concurs with the Mayor during these unprecedented times due to the coronavirus crisis, that it would be make fiscal sense to not charge the residents any interest with late property tax payments," he said.
Damiano also noted that when a new resolution would be passed by council members determining a new due date for making property tax payments, delinquent notices would be sent out informing residents of that due date in order to avoid any retroactive interest to May 1.