Gov. Gavin Newsom Wednesday issued executive orders related to property taxes. One extends the deadline for filing a business-property statement from Thursday until May 31. The other waives penalties for property taxes paid after April 10 for some homeowners and small businesses until May 2021.
California businesses normally have until May 7 each year to file a business property statement with their county assessor, if the value of their business property exceeds $100,000. The statement shows the value of their business personal property (such as machinery, equipment and office furniture but not land or buildings) as of Jan. 1 that year. The statement is used to assess the tax due on that property.
If they don’t file the statement by May 7, they face a 10% penalty on the tax due. However, if they file by May 7, they can amend that statement by May 31 without penalty. Newsom extended the May 7 deadline until May 31 this year. He is not giving businesses extra time to amend the statement, according to the Board of Equalization.
The San Francisco Assessor previously extended its deadline for filing the statement until June 1 because the county offices are closed.
Newsom also said he issued an order that provides relief for late property tax payments.
Normally, property taxes are paid in two installments, the first in December and the second the following April. Payments made later than Dec. 10 and April 10 incur a 10% penalty.
This year, a few counties took advantage of a state law to extend their deadline by having their boards of supervisors pass a resolution closing the tax collector’s office. San Mateo and San Francisco extended theirs until May 4 and May 15, respectively.
Other counties kept their April 10 deadlines but said taxpayers who missed the deadline could apply for a penalty waiver. State law allows a penalty waiver if a late payment is “due to reasonable cause and circumstances beyond the taxpayer’s control.” There is some debate among tax collectors whether late payments due to the coronavirus would qualify for that waiver.
The governor’s executive order “waives penalties for property taxes paid after April 10 for taxpayers who demonstrate they have experienced financial hardship due to the COVID-19 pandemic through May 6, 2021. This will apply to residential properties and small businesses,” Newsom’s office said in a press release.
Several Bay area tax collectors said they were still trying to understand the complicated order, which has various restrictions.
In a press conference, Newsom said, “We are working with the counties to see if we can coordinate and collaborate in a way that can address the hardship claims that were coming in and allow people to get on payment plans, without experiencing that rather sizable 10% tax code penalty that is assessed on those property tax bills.”
His executive order “will provide even more clarity in this space and extend through next May … the penalty waiver for fees and related fines associated with that 10% tax code requirement that will allow people again with hardships to get on payment plans and not have to experience that penalty,” Newsom added.