On Wednesday, Governor Newsom issued an Executive Order specifically authorizing County Tax Collectors to waive late-payment penalties for certain property owners who are unable to timely pay their property taxes due to coronavirus (COVID-19). Several counties had previously implemented programs to assist these taxpayers. The Order clarifies the legal basis for these programs and establishes certain baseline criteria, without limiting any other authority that counties may have to waive, cancel, or excuse penalties, costs, or interest. The Order will remain in effect for one year, until May 6, 2021.
The COVID-19 pandemic and resulting stay-at-home order have severely impacted the finances of many homeowners and small businesses. As a result, some were unable to pay the recent installment of property taxes due on April 10th, and may also be unable to pay the future installments due in December 2020 and April 2021. Failure to timely pay these taxes results in an automatic 10% penalty, plus other costs and interest. In order to allow counties to assist these taxpayers, RCRC partnered with other county organizations to request that the Governor issue an order clarifying the legal authority for waivers of penalties and interest - subject to specific criteria. View the joint statement here.
Only residences occupied by the taxpayer and property owned by small businesses (as defined by the Small Business Administration) are eligible for waiver of penalties and interest. To obtain this relief, the taxpayer must file a timely application with the County Tax Collector, and demonstrate that they have suffered economic hardship, or were otherwise unable timely pay their property tax, due to the COVID-19 pandemic. All taxes on the property must have been current prior to initiation of the stay-at-home order (March 4th), and properties whose taxes are paid through an impound account are ineligible for these waivers, among other criteria.
RCRC-member County Counsels are welcome to contact RCRC General Counsel Arthur Wylene if there are any questions.