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3110-3116 Billing Procedures & Requirements: Special Circumstances

3110. OWNERSHIP PRORATION
The law (Chapter 746, Statutes of 1984) requires proration of taxes according to period of ownership in cases where change in ownership occurs before billing is made for prior supplemental assessments on the same property (Rev. & Tax. Code §75.54(c)). In these instances, one particular assessment is billed to two or more owners based on the actual number of days each owned the property in the portion of the fiscal year affected by the supplemental assessment. If the term of ownership after the supplemental assessment event is less than one day, only the latter owner is billed.

The code states that the unsecured portion of an ownership proration should be transferred to the unsecured roll. Some counties are doing the proration and keeping those on the supplemental roll but coding them as unsecured for collection purposes; they are transferred to the unsecured abstract when they remain unpaid on June 30.

The principles illustrated as applying to two supplemental assessment events also apply to three or more occurrences. In such cases, the assessee for the most recent event receives a prorated supplemental tax bill (or bills, if two fiscal years are involved) and the previous owners receive prorated unsecured bills.

NOTE: If the first supplemental event in a chain is a negative assessment, no proration is made for it. The auditor issues a refund check upon completing enrollment (Rev. & Tax. Code §75.43). However, if the negative assessment occurs after the first event (that has not been billed), a proration should be made.

COMMENT: The tax should not be prorated if a bill for an earlier change in ownership or completion of new construction has already been sent prior to the supplemental event being billed. In such cases, the tax lien is against the real property and is a matter of public record.

Paragraph (d) of Revenue and Taxation Code section 75.54 permits a county the option of ignoring any fraction of the month in which the first supplemental event occurred.

3111. REFUNDS
Refunds arising from negative supplemental assessments are wholly processed by the auditor (Rev. & Tax. Code §§75.41(d) -75.43). The auditor must make refunds within 90 days after enrollment or pay interest to the assessee. Such interest is calculated beginning with the 30th day. The refunds are to be made from taxes collected from supplemental assessments.

3112. APPLICATION OF REFUNDS
The tax collector may apply any refund due a taxpayer or the taxpayer's agent to any delinquent taxes due on the same property for which the taxpayer or the agent is liable (Rev. & Tax. Code §2635.5).

3113. APPLICATION OF REFUND TO FUTURE TAX LIABILITIES
A taxpayer may enter into an agreement with the county to offset his/her refund amount against future tax liabilities. Interest accrues on the refund amount until it has been fully offset (Rev. & Tax. Code §5103).

3114. CANCELLATION OF SMALL AMOUNTS
A common problem of supplemental assessment is issuance of tax bills for small amounts, sometimes only a few pennies. Much of new construction is minor remodeling or the addition of low-value improvements; or a property may resell shortly after a previous sale for only a modest gain in value. Even when substantial value is involved, proration because of multiple supplemental assessment events can result in billing for very small amounts.

Although the provisions of Revenue and Taxation Code section 155.20 are not applicable to supplemental assessment, a tax collector may request the auditor to cancel any tax bill of $20 or less (Rev. & Tax. Code §§75.41(d) and 4986.8).

A county, where authorized by the board of supervisors, by ordinance, may cancel supplemental assessment taxes amounting to the cost of administration but not to exceed $20, or $50 in the case of manufactured home accessories (Rev. & Tax. Code §75.55). Even if a small amount is canceled, the value increase upon which it is based is not. As a result, ongoing regular taxes will reflect the new taxable value.

3115. SUPPLEMENTALS FOR PRIOR YEARS
Supplemental assessments generally can be made for events that take place up to four years prior to the current roll year (Rev. & Tax. Code §75.11(d)(1)).

Exceptions that extend the length of time to enroll a supplemental assessment include situations where concealment or fraudulent acts are involved or where the assessee and the assessor agree to extend the time (Rev. & Tax. Code §75.11(e)).

3116. SUPPLEMENTAL ASSESSMENT CAUSED BY DEATH OF ASSESSEE
Death constitutes a change in ownership for property taxation purposes, unless the successor in interest is a spouse or a legally exempt parent, child or foster child of the decedent (Rev. & Tax. Code §§63, 63.1; Const., Art. XIIIA, §2 subparagraphs (g) & (h)). In the case of transfer to a parent, child or foster child, appropriate written certification providing evidence of the kinship must be filed with the assessor within three years after the transfer (Rev. & Tax. Code §63.1).

NOTE: The date of any transfer between parents and their children under a will or intestate succession is the date of the decedent's death, if the decedent died on or before November 6, 1986.

Under Probate Code section 300, the assessable heirs take title as of the date of death; if the estate is terminated before a tax bill is issued, a request can be made to the assessor to cancel the original assessment. Upon reassessment, the county may re-bill the unsecured tax to the proper assessee. An estate terminated before the enrollment of an assessment is no longer a taxable legal entity.