Sometime soon after the Fourth of July, if you own property in Guilford County, you no doubt received an official-looking letter from the Guilford County Tax Department reminding you that you owe the county thousands of dollars to help pay for all the wonderful services the county provides.
In addition, to encourage you to send the money in right away, the county will give you a 1 percent discount on that bill if you pay early. Guilford County Tax Director Ben Chavis likes to see as much of that money as possible come in by the end of the summer, and collection rates indicate that that 1 percent discount really does entice a lot of property owners in Guilford County.
Here is the official statement of the Tax Department on this year’s timeline for paying: “Real estate and personal property listed for taxation during January are billed in July and may be paid on or before September 3, 2024 to receive a 1 percent discount. Taxes must be paid on or before January 6, 2025 to avoid interest and enforced collection.”
Everyone loves a discount, and, when interest rates were near zero, the 1 percent may have been a better deal, but in a world where that money can be put in a very safe money market fund and be collecting over 5 percent annually, it may make more financial sense to just hold onto that money, collect the interest and then drive your check down to the Tax Department on Monday, Jan. 6, 2025.
You’ll even be getting the interest for the time it takes the check to clear.
It might not make you a lot of money but it is the philosophy many taxpayers across the state follow. Studies have shown that counties with no discount often see money come in very late in the payment cycle.
Guilford County hasn’t always been so stingy with its tax collection deals. The county’s discount rate was 2 percent before 1993 but it went to 1 percent that year when the Guilford County Tax Department’s started collecting taxes for the City of Greensboro.
Years later, in 2014, the commissioners cut the tax break to half a percent of the bill, before, in 2023, moving it back to 1 percent.
According to county staff that year, the half percent discount created about $1.4 million in “lost” revenue. Each additional 0.1 percent of the discount generated a roughly $280,000 revenue loss.
However, one reason the county commissioners decided to move it back up was to collect the interest on the money it gets early.
During the discussion, county staff noted that money may not really be lost. While clearly taxpayers save more with a larger discount, they said, the county would have much more money earlier to invest and draw interest on, and getting the money early also helps with everything from financial planning to providing liquidity to the county’s balance sheet.
Guilford County Tax Director Ben Chavis told the Rhino Times several years ago that he had never been in favor of reducing the rate to half a percent and that he was pleased to see the discount rate raised back to 1 percent.
Ya think citizens are finally waking up to the city and county BS hustles?
Paltry discount.
Should be 4%, at least.
Dubble-duh.
Most counties in NC don’t offer any early payment incentive.
The numbers, for example:
Assume the tax value of a property located in Guilford County and within the City of Greensboro is
$250,000.00.
The combined tax would be
$3464.86.
The 1% discount would be
$34.65.
Vanguard, Chase, Fidelity and many other financial institutions have money market funds currently paying at least 5%. If the total amount of the tax bill were invested in such a fund at 5% per annum, in four months (September through December) it would generate
$57.75.
In this example, it would cost the taxpayer nothing to let his money rest in his money market account until the end of the year. Doing so would net
$23.10.
Not exactly a big haul, but still not bad for doing nothing. Plus, the taxpayer would have access to the money for a longer period of time if it were needed in an emergency.
Any taxpayer that doesn’t understand this cannot say they don’t have enough money.
Don’t forget, they’ll want to raise taxes .5% to make up for the reductions they’re giving people.
Regardless of any discount for early payment, the issue is that property taxes are too high. They are too high because Skip Alston and his followers want them high to enhance their power. A huge percentage of revenue goes to failing schools that you, the taxpayers, are paying for. Reminder: Vote NO in November for Skippy’s tax increase that will go to repay the enormous debt that Guilford County has incurred for failing schools. Skippy and other Democrats believe that the way to fix a problem is to throw more money at it. The Guilford County schools are a money pit because money will not fix the problem.