Town Sells Its Tax Liens

By Steve Bigham

Newtown Finance Director Ben Spragg announced this week that the town has sold $250,000 worth of municipal tax liens to American Tax Funding of Florida.

The sale is a win-win for the town as it rids itself of the liens, while still collecting 100 percent of the taxes and late-payment interest.

The proceeds will be transferred to the town’s capital non-recurring reserve fund to help offset taxes in the 2001-2002 budget.

Mr Spragg said American Tax Funding was chosen because it came through with the highest bid. The agency is likely to charge those delinquent taxpayers an 18 percent interest fee. Mr Spragg said these types of companies usually work with the property owners, sometimes offering them a chance to refinance their mortgage through them.

This is the third year that Newtown has sold its liens, bringing in $427,000 in 1999 and $130,000 last year. Two years ago, the town anticipated selling $1.7 million in tax liens. However, the town notified its delinquent taxpayers of the plan to sell the liens and several of them came forward. Apparently, they would rather deal with the town than an outside agency. Many of those who came forward either paid their taxes in full or set up a payment plan.

Two years ago, state legislators passed a law permitting the sale of tax liens and several other towns have taken up the practice.