TRIM Notices [Lowndes Legal Talk]

Tune in to Lowndes Legal Talk featuring attorneys Brendan Lynch and Brian Smith discussing TRIM notices and property valuation, including the possible effects of COVID-19 on property values.

Lowndes Legal Talk is a video and podcast series designed to provide you with perspectives on the legal and business issues affecting you.

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President Trump Signs Executive Order Deferring Certain Payroll Tax Obligations Through December 2020

By: Amanda Wilson & Ferran Arimon

On Saturday, August 8, President Trump enacted four executive orders after Democrats and the White House were unable to reach an agreement on a new stimulus bill last week. Among the four executive orders, the President included a payroll tax deferral. The relevant order states as follows:

To that end, today I am directing the Secretary of the Treasury to use his authority to defer certain payroll tax obligations with respect to the American workers most in need. This modest, targeted action will put money directly in the pockets of American workers and generate additional incentives for work and employment, right when the money is needed most.

The order calls for deferral of the employee portion of payroll taxes, 6.2% for Social Security and 1.45% for Medicare, for workers making less than $100,000 a year through the rest of 2020. Any amount deferred pursuant to the implementation of this order may be deferred without any penalties, interest, additional amount or addition to the tax.

However, as it stands, employees will still owe the deferred taxes at the end of the year since President Trump cannot eliminate the tax liability without legislation. In an effort to address the concerns regarding payment at the end of the year, the following language was also included in the White House’s Memorandum on Deferring Payroll Tax Obligations:

The Secretary of the Treasury shall explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.

President Trump has stated that if reelected he plans to forgive these deferred taxes and make permanent cuts to payroll taxes. Again, though, this requires legislative action. If the President is not reelected, workers will presumably be required to pay these taxes at the end of the year.

The other three actions signed on Saturday include as much as $400 in enhanced unemployment benefits, an executive order on assistance to renters and homeowners and a memorandum further deferring student loan payments through December 31, 2020.

What will happen to my 2020 Property Taxes?

By: Brendan Lynch

As the pandemic continues to ravage many industries, senior living facilities continue to stand apart as specially impacted properties. From the outset of the COVID-19 crisis, these facilities have been in the news, not only for the devastation the virus has inflicted upon residents and staff, but also for best practices in preventing future outbreaks. As a result, the actual financial impact has taken somewhat of a back seat in the discussion. In Florida, where proposed tax notices come out in August in all 67 counties, this financial impact will come front and center.

Florida has an assessment date of January 1 of the given year, so the working presumption is that there will be little-to-no tax relief afforded any property for the 2020 tax year, unless the Legislature enacts some sort of tax rebate to impacted industries. The reason for no relief in 2020 is because as of January 1, 2020, there was no known impact from the pandemic – that will all be felt in the 2021 tax year (based on 2020 income stream). While tax rebates are being discussed, and pushed by certain trade associations, there is no concrete plan in place for this to happen.

However, that does not mean that you should simply ignore these Truth In Millage (TRIM) notices when they are mailed to you in August. Instead, a thorough examination of your 2019 income stream should take place, as well as an evaluation of what your county’s individual Property Appraiser did to assess the property. There has been a recent property tax decision in the Fifth District Court of Appeal (based on the Disney Yacht & Beach Club 2015 assessment) that states that ancillary income needs to be calculated differently. Could this apply also to senior living facilities, where a significant amount of income stream comes from non-realty related services, such as nursing, dining, and housekeeping, among others?

Lowndes recommends reaching out to a property tax professional to evaluate your 2020 proposed tax notice, and see if the valuation includes this non-realty related income.


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