Request By:
Mr. Roger W. Perry
Marshall County Attorney
Marshall County Courthouse
Benton, Kentucky 42025
Opinion
Opinion By: Steven L. Beshear, Attorney General; By William S. Riley, Assistant Attorney General
In your letter to the Attorney General you ask three questions:
(1) What should you do when a sum has been set aside in a proceeding such as an estate closing to pay taxes but the taxes are not paid on a certain date and an additional amount is now owed?
(2) May an annual percentage on delinquent taxes be collected?
(3) May an escrow account be set up by the County Attorney's office to collect partial payments on delinquent taxes?
First, you present a situation where, I assume, you are trying to collect on a certificate of delinquency and the taxpayer dies or declares bankruptcy or some such similar occurence. At some point in the proceeding an amount is set aside to pay delinquent real estate taxes, but the taxes are not paid at that point and the amount owed continues to accrue interest daily. It is our opinion that the exact amount owed on delinquent taxes must be figured as of the day paid. This would include the current interest charges. Therefore, if the taxpayer or his representative does not offer to pay the full amount owed as of the date payment was offered, the county clerk cannot accept. However, as this involves real estate taxes, the lien on the property would continue.
Question two involves some of the same considerations, vis-a-vis the interest. KRS 134.460 states that certificates of delinquency shall bear interest from the date of issuance until collected at the rate of twelve per cent (12%) per annum. It is our opinion that the interest must be computed on the day payment is offered (regardless of whether it is the first of the month or not) since interest will accrue daily.
Finally, you ask if an escrow account set up by the county attorney's office for delinquent taxpayers to make partial payments is statutorily permitted and ethical. It is not within the scope of this opinion to pass on the ethical considerations of such a project. We would refer you to the Kentucky Bar Association for that determination. Regarding statutory permission, we find nothing in the statutes specifically permitting or prohibiting this situation. From the facts as you present them, we can discern no statutory difficulties with this situation.