The following information provides general guidance in administering collection of property taxes that fall under the provisions of the federal Soldiers’ and Sailors’ Civil Relief Act. These guidelines primarily address provisions found in Article V of the act relating to taxation of property.What is the Soldiers' and Sailors' Civil Relief Act?
Protection under the act extends to all military personnel regardless of duration of military service or financial status. The act permits a qualifying individual to apply for temporary relief from payment of local property taxes. Active duty military personnel do not need to show that the ability to pay their property taxes is impaired by their military service.
The following guidelines should enable you to assist members of the military and their families in obtaining the tax relief they are entitled to under the act. A question and answer format is used to explain most situations that are likely to arise.
The act (50 USCS appx. §501 et. seq.) took effect October 17, 1940. The act’s purpose, as stated in §510, is to “. . . suspend enforcement of civil liabilities, in certain cases, of persons in the military service of the United States in order to enable such to devote their entire energy to the defense needs of the Nation. . . .”
The act provides that “A member of the Armed Service need not show that his military service prejudiced his ability to redeem title to property before he can qualify for the statutory suspension of time. The statutory command in §525 is unambiguous, unequivocal, and unlimited” (Conroy v. Aniskoff, 507 U. S. 511 (1993)). The Supreme Court further opined, “The statute’s complete legislative history confirms a congressional intent to protect all military personnel on active duty, not just those whose lives have been temporarily disrupted by the service.”
What benefits does the act provide?
The serviceperson, any of his or her adult dependents, or anyone with his or her power of attorney may apply for protection under the act. When a case is unclear, seek the assistance of your county counsel.How does an individual apply for benefits?
The following individuals do not qualify under provisions of the act:
• Military retirees
• Persons on inactive reserve status
• Civilian defense workers
• Merchant seamen
Most applicants will contact the county by mail. The applicant need not obtain a court order or provide an affidavit in order to establish a valid claim. We suggest the use of SCO 1-08 Military Personnel Tax Relief Application (see last page of this document) or a similar county-designed form. Stress that the claim is submitted for a financial benefit and made subject to penalty for perjury.
How does one verify whether the applicant is an active member of the armed forces, or was for the period being claimed?
When the claimant does not provide a copy of military orders that prove eligible status, you may wish to verify the application with the nearest personnel or legal office of the appropriate branch of service.
Must the applicant be in a war zone or engaged in hostilities to qualify?
No. The act applies to all active members of the armed forces, regardless of where they are stationed.
Which taxes are subject to the 6 percent interest in lieu of penalties and other charges?
a. Current taxes:
If current-year taxes and assessments become delinquent after onset of qualifying service, they are subject only to interest at 6% per year computed beginning with the time of delinquency under California law. Do not apply costs, penalties, redemption fees, or other charges.
b. Delinquent/defaulted taxes and assessments for prior years:
Amounts accrued as of the onset of qualifying service remain charged against either the person or the property. But, during the protected period, additional penalties that would be imposed pursuant to Revenue and Taxation Code §2922 or §4103 are set aside in favor of the protected period.
c. Installment redemption plans:
The act shields the serviceperson eligible under its provision from making payments currently and tolls (suspends) the effect of state lien-perfection laws during the protected period. You may not default any plan because current taxes have not been paid. For the protected period, substitute a 1/2% per month charge pursuant to the act for the 1-1/2% per month interest required by subparagraph (d) of Revenue and Taxation Code §4221.
If a a Power to Sell lien was recorded before the onset of qualifying service, may the property still be offered at a tax sale?
Yes. However, we do not recommend this course of action since the former owner may, pursuant to §650 of the act, redeem it within six months after termination of service. Most applicants will contact the county by mail. The applicant need not obtain a court order or provide an affidavit in order to establish a valid claim. We suggest the use of SCO 1-08 Military Personnel Tax Relief Application (see last page of this document) or a similar county-designed form. Stress that the claim is submitted for a financial benefit and made subject to penalty for perjury.
How is the 6 percent interest calculated pursuant to the act?
Calculate interest on a daily basis. For example, a secured tax for 2004/2005 of $500, protected under the act and paid on June 14, 2005, would require a payment of $510.53: $257.79 (first installment), plus $252.74 (second installment), based on 187 days and 66 days, respectively, each multiplied by a factor of .0001666 applied to $250.00. Can penalties be waived?
In addition to federal provisions, state law allows the county to waive penalties with respect to current taxes. Revenue and Taxation Code §4985.2 presents servicepersons an opportunity to avoid payment of any charge, beyond the basic amount, if they can show that the failure to pay the current taxes on time was due to circumstances beyond their control, occurring notwithstanding ordinary care and in the absence of willful neglect.
A county auditor or tax collector who considers military service a sufficient excuse or determines that there is some other mitigating circumstance for not paying property taxes on time may waive penalties, costs, and other charges levied under California law. In that case, the 6% interest under the act would not apply.