Wednesday marks the last day to pay Knoxville and Knox County property taxes for 2011. Even though a majority of people take care of their bills on time, local government records reveal millions of dollars in delinquent taxes are due.
That money could benefit the Knoxville area, and property tax collectors are working to bring more of that money in. 10News began an investigation into delinquent property taxes several months ago. We obtained delinquent property tax records from Knoxville and Knox County.
Click here to see those documents, along with links to city and county resources.
From developers to retail businesses to individuals, many property owners owe back property taxes. Initially, 10News tried to come up with a "top ten" list of those who owe the most between Knox County and the City of Knoxville. But that proved to be a somewhat impossible task. First, the numbers are constantly changing. Second, it's sometimes tough to tell who owns multiple properties. But maybe most importantly, there are a lot of reasons why some people are not paying in full and on time.
"We were immediately hit with a double property tax situation that we were not expecting in our business plan," said Renie Carroll, General Manager of the Country Inn and Suites at Cedar Bluff.
The Country Inn and Suites opened its doors in 2009 to an unstable economy.
"It was probably the worst time to open a hotel. Properties that had seen client bases struggled," Carroll said. "It was a $5 million dollar project and half-way during construction the city actually annexed the property."
Carroll, along with owner Shailesh Patel, knew that meant unexpected property taxes and a strain on the hotel's revenue. Over the past few years, the bills piled up. As of February 29, 2012, they currently owe a combined total of $177,922.52 between Knox County and the city of Knoxville.
"When we opened and knew that the business climate was going to be as tough as it was, our main focus was to keep our staff," Caroll said.
But Knoxville Collections Manager Donna Dyer said most people pay their bills.
"Generally speaking, between 95 and 96 percent of those that own property in the city of Knoxville pay their taxes on a current basis," Dyer said.
The same holds true for Knox County property owners. Both the city and the county have teams working to go after the small percentage of people who are behind. Overdue bills, as of February 29, 2012, totaled $26,443,063.01 in taxes, penalties and interest combined.
"We see a number of delinquent tax payers that are delinquent year after year," Knox County Delinquent Tax Attorney Chad Tindell said.
He says some who owe have worked out payment plans with the Knox County Trustee's Office.
"We work with every taxpayer, whether they owe $1,000 or $100,000, as far as setting them up, trying to set them up on some sort of regular payment schedule," Tindell said.
Country Inn and Suites has set up a payment plan and agreed to pay Knox County $10,000 per month to get caught up. The business is also in talks with the city.
"Our goal is to have everything paid off this year. So we are on track to do that," Carroll said.
For Carroll, accountability means supporting the community by paying.
"We want to do the right thing and get off to the best start here in Knox County and in the city," Carroll said.
Another property owner is also struggling to pay in full and on time.
"This particular property that owes $120,000 -- $38,000 is fines, interest and penalty and court costs," Dyer said.
Dyer is talking about the city taxes owed on a property in West Knoxville that's owned by Fowlers Holdings, LLLP. The property is home to Fowler's Furniture.
The same Knoxville and Knox County tax records show Fowlers Holdings owes $209,302.98 in taxes and fees combined, as of February 29, 2012. Fowlers Holdings is behind two years on its property taxes with both the city and the county. It also owes back taxes on another building in Loudon County.
"We intend to pay it all at one time, just as soon as this issue is resolved with the bank," said Don Fowler, Fowlers Holdings General Partner.
Mr. Fowler said the company is behind because last year federal regulators seized the bank that had a mortgage on the West Knoxville and Loudon County properties. He's been in a dispute over the loan for even longer. Mr. Fowler said his wife has notified the local governments about the problem.
"The county and the city's gonna get the tax money. It comes ahead of the bank's lien. So, they'll get the money. All I'm trying to do is get the bank to go ahead and pay it and let us move forward," Fowler said.
County Delinquent Tax Attorney Chad Tindell told 10News:"We have made multiple demands and attempts to discuss this tax bill. Though a few tax payments have been made, we have not received much cooperation from Fowlers (Holdings)."
Dyer said the West Knoxville property has been close to being sold in the city's tax sale, but Fowlers Holdings pays just enough to avoid it.
"They paid the bottom year out to be, so they are removed from [tax sale] nine. What we'll do is roll them over to the next tax sale, but that's two years down the road," Dyer said.
Don Fowler said his company owns forty other pieces of property, and taxes are up to date on all of them. Of course, Fowlers Holdings is just one of hundreds of property owners with past due taxes. Throughout this 10News investigation, we learned there are many reasons why property owners can't pay on time.
Tindell said those include bankruptcy, appeal and the fragile economy. Knox County Mayor Tim Burchett said anytime someone doesn't pay, it's a loss to local government's budgets.
"That makes our kids suffer, it makes our law enforcement suffer, our parks, our libraries, you name it," Mayor Burchett said.
The lists of delinquent property taxes evolve daily as some people pay their bills and others get added to it. Interest and penalty can add up to 18 and 24 percent in the county and city respectively. And any unpaid taxes from 2011 are considered delinquent as of March 1, 2012.
Year to year, the city of Knoxville says its delinquent tax collections are flat. But Knox County saw a spike.
Tindell said delinquent collections rose 28 percent from fiscal year 2010 to 2011, from $8,455,233.16 to $10,905,871.30. The county said key changes in the trustee's office helped bring in more taxes. One major switch: before Trustee John Duncan started in 2010, the office contracted with a delinquent tax attorney.
Now, Tindell is on the county's payroll, and it's his full-time job to collect overdue taxes.