April 22, 2020Client Alert

Property Tax Payment Provisions in Wisconsin COVID-19 Relief Legislation

On April 15, 2020, Wisconsin Governor Tony Evers signed the COVID-19 relief legislation enacted by the Wisconsin Legislature, known as 2019 Wisconsin Act 185. Among the relief provisions are two sets of provisions that affect residential and commercial real estate owners who did not pay their full 2019 real estate tax by January 31, 2020, and are paying the remainder of their 2019 real estate tax in authorized installments.

1.   Deferred Payment of Remaining Installments

The first provision affects whether the remaining installments can be paid after the current due dates. While earlier drafts of the bill had given municipalities the authority to simply extend those due dates, the final Act does not permit extension of any due dates. Instead it provides the potential for municipalities to grant “hardship” waivers of interest and penalties for installments due after April 1, 2020 that are paid late. Under the Act, granting municipalities the authority to issue such waivers must be accomplished in two stages, first by the county in which the property is located and then by the municipality in which the property is located.

First, the county board in which the property is located must enact an ordinance granting municipalities within that county the authority to issue hardship waivers. That county ordinance must also establish “criteria for determining hardship.” Next, the municipality in which the property is located must enact a “similar resolution” to the county ordinance, which presumably means the municipality must adopt the same “criteria for determining hardship” as the county. A municipality adopting such a resolution can choose to grant hardship waivers on either a “general or case-by-case” basis. In all cases, interest and penalty waivers can only be granted through October 1, 2020. After that date, all remaining unpaid installments due on or before October 1 are subject to statutory interest and penalties.

It is unclear at this point how quickly county and municipal boards may act to enable hardship waivers, or how county boards will go about “establishing criteria for determining hardship.” County boards could conceivably act quickly to encompass all or virtually all property owners as being eligible for a hardship waiver, much as the United States Department of Treasury did in March in making a blanket determination that any person with a federal tax return or payment due on April 15, 2020 was “affected by the COVID-19 emergency for purposes of” being eligible for the extended July 15, 2020 deadline. On the other hand, county boards could establish detailed criteria for determining hardship on a property type or even a property-by-property basis, which would slow the process down considerably, potentially require municipalities to make individual judgments, and create significant uncertainty for property owners even after the ordinances are enacted.

As a result, no property owner can have certainty at this point that it will be eligible for an interest or penalty waiver under the Act, if it decides to defer remaining installment payments past the statutory due dates.

2.   Ongoing Challenges to 2019 Assessments

Property owners challenging their assessments must stay current in their tax payments for the year under challenge in order to maintain those challenges. Ordinarily a property owner making an installment payment late would immediately lose the right to continue its assessment challenge; however, the Act provides relief for property owners challenging their 2019 assessments s who have not fully paid their 2019 tax. The Act provides that for purposes of 2019 assessment challenges, any tax payment due in 2020 will be considered timely if all tax payments otherwise due prior to October 1, 2020 are made by October 1, 2020.

This provision is completely independent of the provision on interest and penalty waivers discussed earlier. Although property owners challenging their 2019 assessments can rely on this provision immediately and still maintain their assessment challenges as long as payments due prior to October 1, 2020 are made by that date, interest and penalties may still apply.

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