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Waiver of Additional Charges for Delinquent Real Estate Tax Payments

On July 11, 2022, Governor Tom Wolf signed into law Act 57 of 2022 (“Act 57”), which amended the Local Tax Collection Law, Act 394 of 1945 (the “LTCL”).  Previously, the LTCL provided that a taxpayer’s failure to receive a notice regarding the payment of real estate taxes did not relieve that taxpayer from paying any penalty, fee, interest, or other charges that may have accrued up until the date of payment.  Act 57 now requires the tax collector for the various taxing districts (school districts, municipalities, and the County) to waive those additional charges in specific situations, whether or not authorized by the tax districts.

The purpose behind Act 57 is to address a situation that occurs when homes and lots are sold immediately after a taxing period begins (January 1 for local and county taxes and July 1 for school taxes).  Many taxing districts likewise commence the printing of the tax bills at this time.  If the tax bill is already printed in the old owner’s name prior to the date that taxing districts receive notice of the property transfer, that tax bill will be mailed to the old owners and thereafter forwarded to whatever forwarding address the old owners established with the Post Office.  This results in the new owner never receiving the original tax bill, only a notice that the taxes are now delinquent.

Act 57 requires the Department of Community and Economic Development to create and distribute a form to every taxing district to be filled out by a taxpayer seeking to waive the additional charges imposed for the lack of timely payment.  The taxpayer must fill out the waiver form attesting that the taxpayer never received notice of the taxes. The form is to be submitted to the “tax collector in possession of the claim” which could be the actual tax collector or the Tax Claim Bureau, depending on whether the taxes have been turned over as delinquent.

The taxpayer must also provide sufficient evidence to the tax collector demonstrating the acquisition of the property in question within twelve (12) months of the date the waiver is requested.  For a fee simple home, this would be a copy of the recorded deed showing the date of transfer.  For a mobile or manufactured home, this would be a copy of the title issued for the home, or an executed lease between the owner of the home and the owner of the property where the home will be situated.  Lastly, and most importantly, the taxpayer must pay the entire amount of the face value of the taxes to the tax collector simultaneously with the waiver form and evidence of ownership.

The waivers are applicable for all real estate taxes assessed in the first tax year following the effective date of the legislation, or October 9, 2022.  This means it only applies to taxes assessed for the 2023 local and county tax year, and the 2023/2024 school tax year.  Of immediate concern, Act 57 mandates that each taxing district adopt an ordinance or Resolution on or before January 7, 2023, imposing the foregoing waiver obligations upon its tax collector.

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