Request By:
Ray L. Ballou
Bahrman & Ballou
Attorneys at Law
206 North Main Street
P.O. Drawer 724
Corbin, KY 40701
Opinion
Opinion By: Steven L. Beshear, Attorney General; By William S. Riley, Assistant Attorney General
In your recent letter request is made for a step by step procedure to collect delinquent taxes in third class cities.
There are several statutes that must be examined in order to arrive at any overall picture of the steps necessary to be used by third class cities to collect delinquent ad valorem property taxes.
KRS 92.570 provides that tax bills be made out and delivered in third class cities by the city clerk to the tax collector not later than June 1. The tax bills shall, in the hands of the collector, have the effect of an execution in favor of the city against the taxpayer and his property for the tax due.
Under KRS 92.620 the city collector has the power to levy upon personal property to satisfy the tax bills in his hands and have the same power given by the law to the sheriff for collection by garnishment. Garnishment and Attachment provisions are found in KRS 135.010 as amended by the 1978 Extraordinary Session of the General Assembly.
KRS 92.650(2)(b) gives a third class city a lien for five years from the date of assessment on property assessed and on all other property of each person for all taxes due the city.
KRS 92.660(3) gives a third class city collector the power to distrain or seize personal property to satisfy a tax bill.
KRS 92.680 provides that where there is no personal property which can be seized and the taxes are not paid within four months after the collector has received the tax bills for collection, the collector may levy on real property and sell as much thereof for cash to satisfy the taxes, commissions and costs. The statutes governing the powers and duties of sheriffs in levying on and selling property under execution are applicable to a third class city tax collector in the seizure and sale of such property. Where there are no bids on the bills, the mayor bids on the property on behalf of the city. All sales of real property and all deeds of conveyance made by the collector to satisfy the delinquent tax claims shall be as valid as sales of real property made by the sheriff under execution and the purchasers of real property at sales made by collectors shall be protected to the same extent as purchasers under execution sales.
Under KRS 92.710 where real property has been sold in a third class city for taxes the description of the property and the place of sale, the name of the purchaser and the amount paid is delivered to the city clerk who records it and the collector is required to give the purchaser a certificate of purchase which is to be recorded by the city clerk.
Under KRS 92.730(2) real property sold for taxes may be redeemed by the owner of the property, his heirs or personal representatives within one year from the day of sale by tendering to the purchaser or his representatives the full amount for which the property sold with 20% interest thereon from the day of the sale. Where the owner of the property is a minor, a married woman or a person of unsound mind, there is a two year allowance in which the property may be redeemed.
Under KRS 92.760(2) if real property of a person not under disability is sold for taxes and not redeemed within the time allowed under KRS 92.730, the purchaser shall be entitled to a deed to the property.
Under KRS 92.780 an alternative method for recovering taxes by action of the city attorney is provided.
Once the collector receives the tax bills for collection purposes he should immediately attempt to collect the bill by all means set out in the statutes. Where the bills become delinquent every effort should be made to distrain or seize personal property to satisfy the bill. If that is not possible, a further step may be the garnishment of the taxpayer's wages.
After the exhaustion of all these remedies, the final step is the sale of the real property by the collector as provided in the statutes, keeping in mind that under KRS 92.780 the city attorney can also be required to sue upon delinquent city tax bills to collect them by action against the taxpayer.