Obtaining a substantial refund check for our clients can be one of the most dramatic results of a tax appeal. It’s a rare client that isn’t pleased to receive a check. And the County pays a variable rate of interest often between 3 and 4 percent, which is a better return than is offered by most money market accounts. Here’s why it’s a less than optimal result.
Refund checks are of necessity evidence that you overpaid, in the first place. In other words, if you’re receiving a refund, you’ve effectively loaned your local government money at an interest rate substantially below what you could recover through reasonably prudent investing. Clearly, it would be better if the money never left your account in the first place.
Additionally, when the County must disgorge funds to pay out a refund, there is a net loss to the service providers: the Schools, Parks, Sanitation, and related service agencies. By contrast, when your assessment is corrected before the issuance of your bill, any taxes you don’t pay are distributed across the remaining tax base in your district. Consequently, there is no net diminution of the levy collected. Presumably, you chose the location of your business or home precisely because of the quality of the local services, so it isn’t to your advantage to reduce available area resources.
Arguably then, when a refund is issued, everyone has lost something. The taxpayer has been deprived of full access to the earning potential of their capital. The local district has been defunded, and the County has lost substantial revenue administering appeals that might have been attained instead through the State or the Courts.
Lastly, appeals in the Courts and at the State level are protracted. Although these agencies are extraordinarily efficient, diligent and hardworking, limited funding and staffing together with the rigor required of tax appeals at the highest level, resulting in casework that can extend for four or five years before a resolution is reached.
Unfortunately, State and Circuit Court Appeals are sometimes the only recourse. Certain valuation issues best decided in a venue with a broader geographic scope. Other issues require a venue where an open timeline is available to allow for a fuller discourse than is possible at the County level where appeals must typically be heard within a year. Finally, certain types of evidence are not fully available within the limited time frame of County appeals, necessitating an appeal in the Courts or at the State level.
It is therefore critical that your representation act with the utmost sensitivity to the need for a timely resolution of your appeal, reserving for the State and the Courts only those matters which absolutely require them for an equitable resolution of your matter.