Johnston residents who are seriously delinquent paying their car tax bill may soon find that their state tax refund will be taken to pay the outstanding obligation.
Beginning this week, 2,223 letters were sent out to residents informing them that their car taxes were outstanding. According to Mayor Joseph Polisena and Johnston Finance Director Joseph Chiodo, the General Assembly in 2011 passed enabling legislation to allow cities and towns to file with the state Department of Revenue’s Income Tax Refund Offset Program to assist in receiving payments from individuals that were delinquent on car or real estate taxes.
Under the program, towns would submit the names of delinquent taxpayers and amounts owed to the department and, if those taxpayers had a state refund due to them, the department would hold the amount owed and give it to the town as payment.
“I kind of didn’t want to go that route so we kind of ignored it. This past year when they passed the car tax bill, they mandated this. There are 2,223 people on this list. We were trying the conventional method of sending bills out, but obviously it hasn’t worked,” said Polisena. “This year they threatened to take over $601,000 in state aid away from the town of Johnston if we didn’t do our due diligence.”
The tax bill letter currently being sent states that the recipient has an outstanding debt that is owed to the town. It informs the taxpayer that the town intends to submit the outstanding liabilities to the Rhode Island Department of Revenue Division of Taxation for the collection through the income tax refund offset program. The program allows for the division to intercept state income tax refunds and apply them to outstanding liabilities owed to government entities.
The bill states that this action is not an ordinance or policy of the Town of Johnston, but that this procedure is mandated by the state of Rhode Island and passed by the General Assembly. The letter goes on to inform the recipient of the right to dispute or pay the liability in full no later than 30 days from the date of the notice. Once the Division of Taxation receives the debt, any state income tax refund the recipient is due may be taken to pay off the outstanding liability owed to the town, with any remaining amount of the refund to be sent back to the recipient.
Should a recipient feel they’ve received the notice in error, there are phone numbers listed to the town that may be called with inquiries. Those that have recently filed bankruptcy and have been granted a one-year stay for collections are asked to contact the number provided to make arrangements to provide appropriate documentation.
“I didn’t want to do this because it’s kind of a little harsh and I was looking at other methods like sending an overdue notice, which we do every year, but that’s not working. Now the General Assembly passed this law, the senators and representatives of the town, they voted for this, I’m sure,” said Polisena. “So if the people are upset, they need to call them and have them change the law back. If we don’t do this, I’m not going to allow my taxpayers to be penalized to take back $601,333.14 in state aid, there’s no way. These people need to pay; they have to pay.”
The outstanding bills include both business and personal vehicles. If the bill is not paid, car owners will find that they’ve been blocked when it comes time to re-register their cars. Overall, the town sends out more than 18,000 car tax bills.
“In this situation, maybe I was a little naïve, and I’m not usually naïve because I usually go after the jugular when someone owes the town something, whether its taxes or anything else, but we would continue to send bills,” said Polisena. “Now we are being mandated.”
According to Polisena and Chiodo, the total amount of the outstanding delinquent taxes is $2,341,058.32 as of Nov. 1. This action affects bills from 2012 to 2016. The mayor reiterated that aggressive tax collection has allowed the town to forgo a tax increase for the last two years.
“The day of reckoning is coming. They have to pay like everybody else who pays their bills and who do their due diligence to ensure that their taxes are paid,” said Polisena.