Permits municipalities to waive interest on certain delinquent property tax payments delivered after required due date.

A5220

ASSEMBLY, No. 5220

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 4, 2026

Sponsored by:

Assemblyman� MICHAEL INGANAMORT

District 24 (Morris, Sussex and Warren)

Co-Sponsored by:

Assemblyman McClellan

SYNOPSIS

���� Permits municipalities to waive interest on certain
delinquent property tax payments delivered after required due date.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning certain delinquent property tax
payments and amending R.S.54:4-67
.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� R.S.54:4-67 is amended
to read as follows:

���� 54:4-67.����� a. �(1) �The
governing body of each municipality may by resolution fix the rate of discount
to be allowed for the payment of taxes or assessments previous to the date on
which they would become delinquent.� The rate so fixed shall not exceed 6% per
annum, shall be allowed only in case of payment made on or before the thirtieth
day previous to the date on which the taxes or assessments would become
delinquent, after subtracting the amount of applicable property tax credit as
defined in section 1 of P.L.2018, c.11 (C.54:4-66.6).� No such discount shall
apply to the purchaser of a total property tax levy pursuant to section 16 of
P.L.1997, c.99 (C.54:5-113.5).� The governing body may also fix the rate of
interest to be charged for the nonpayment of taxes, assessments, or other
municipal liens or charges, unless otherwise provided by law, on or before the
date when they would become delinquent, and may provide that no interest shall
be charged if payment of any installment is made within the tenth calendar day
following the date upon which the same became payable.� The rate so fixed shall
not exceed 8% per annum on the first $1,500.00 of the delinquency and 18% per
annum on any amount in excess of $1,500.00, to be calculated from the date the
tax was payable until the date that actual payment to the tax collector is
made.

���� (2)�� Notwithstanding the
provisions of paragraph (1) of this subsection regarding delinquent payments,
in the case of a municipality that has experienced a flood, hurricane,
superstorm, tornado, or other natural disaster, interest shall not be charged
by the municipality to a delinquent taxpayer if:

���� (a)�� a state of emergency has
been declared as a result thereof by the Governor less than 30 days prior to
the date upon which a property tax installment payment is payable pursuant to
R.S.54:4-66 or section 2 of P.L.1994, c.72 (C.54:4-66.1), as appropriate, and

���� (b)�� the governing body of
the municipality adopts a resolution providing that interest shall not be
charged to a delinquent taxpayer if payment of the property tax installment,
plus any available property tax credit as defined in section 1 of P.L.2018,
c.11 (C.54:4-66.6), is made on or before the first day of the next calendar
month from the date upon which it became payable.

���� (3)�� The municipal clerk
shall notify the Director of the Division of Local Government Services in the
Department of Community Affairs of its adoption of a resolution effectuating
the provisions of paragraph (2) of this subsection not later than the third business
day next following the municipal governing body's adoption of the resolution.�
If the municipality is under State supervision pursuant to the provisions of
Article 4 of the "Local Government Supervision Act (1947)," P.L.1947,
c.151 (C.52:27BB-54 et seq.), is subject to the provisions of the
"Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43
(C.52:27BBB-1 et al.), or is otherwise subject to a memorandum of understanding
or similar agreement with the division as a condition of receiving supplemental
State aid, the resolution shall not be effective unless it is approved by the
director.

���� (4) �(a) �As used in this
paragraph:

���� "Eligible resident"
means either:

���� (i)��� an employee of a
federal government agency who is furloughed because of a shutdown and receives
unemployment benefits during the shutdown or who works during a shutdown but is
not paid because of the shutdown; or

���� (ii)�� a contractor whose pay
is received through a contract with a federal government agency but whose
payment is delayed or diminished because of a shutdown, provided that the
contractor receives unemployment benefits during the shutdown.

���� "Shutdown" means any
period in which there is more than a 24-hour lapse in appropriations for any
federal government agency as a result of a failure to enact a regular
appropriations bill or continuing resolution due to an impasse between the President
and the Congress of the United States or between the two Houses of Congress.

���� (b)�� Notwithstanding the
provisions of paragraph (1) of this subsection regarding delinquent payments, a
municipality shall not charge interest to a delinquent taxpayer who is an
eligible resident or who resides with a spouse, partner in a civil union, or
domestic partner who is an eligible resident, if:

���� (i)��� a shutdown remains in
effect for more than 21 days and either ends less than 14 days prior to the
date upon which a property tax installment payment is payable pursuant to
R.S.54:4-66 or section 2 of P.L.1994, c.72 (C.54:4-66.1), as appropriate, or
remains in effect on the date that the property tax installment payment is due
and payable; and

���� (ii)�� the governing body of
the municipality in which the delinquent taxpayer resides adopts a resolution
providing that interest shall not be charged to such a delinquent taxpayer if
payment of the property tax installment, less any available property tax credit
as defined in section 1 of P.L.2018, c.11 (C.54:4-66.6), is made on or before
the date upon which the next property tax installment payment is payable.

���� (c)�� Interest shall not be
charged pursuant to this paragraph only if a delinquent property taxpayer
provides to the municipality proof that the delinquent property taxpayer's pay,
or the pay of the delinquent property taxpayer's spouse, partner in a civil union,
or domestic partner, is derived from a federal government agency that is
affected by a shutdown.� In the case of a federal employee, that proof shall be
demonstrated by a pay stub showing employment by a federal government agency
that is affected by a shutdown.� In the case of a contractor, the resolution
adopted by the governing body of the municipality pursuant to subparagraph (b)
of this paragraph shall establish the criteria necessary to verify the that the
contractor's pay is received through a contract with a federal agency that is
affected by a shutdown.

���� (d)�� The municipal clerk
shall notify the Director of the Division of Local Government Services in the
Department of Community Affairs of the municipality's adoption of a resolution
effectuating the provisions of part (ii) of subparagraph (b) of this paragraph
not later than the third business day next following the adoption of the
resolution.� If the municipality is under State supervision pursuant to the
provisions of Article 4 of the "Local Government Supervision Act
(1947)," P.L.1947, c.151 (C.52:27BB-54 et seq.), is subject to the
provisions of the "Municipal Rehabilitation and Economic Recovery
Act," P.L.2002, c.43 (C.52:27BBB-1 et al.), or is otherwise subject to a
memorandum of understanding or similar agreement with the division as a condition
of receiving supplemental State aid, the resolution shall not be effective
unless it is approved by the director.

����
(5)�� (a)� Notwithstanding
the provisions of paragraph (1) of this subsection regarding delinquent
payments, a municipality may not charge interest to a delinquent taxpayer if:

����
(i)��� a paper check for a
property tax installment was mailed by the taxpayer using the United States
Postal Service in an envelope postmarked at least one calendar day prior to the
first day of the month of the property tax quarter in which the delinquent
property tax payment was due and payable;

����
(ii)�� the envelope in
which the paper check was mailed was correctly addressed to the municipal tax
collector or other entity that is authorized to receive property tax payments;

����
(iii)� the paper check was
not delivered by the United States Postal Service was not delivered to the tax
collector prior to the last day of the grace period provided by the
municipality for property tax payments due to mishandling by the United States
Postal Service; and

����
(iv)� the governing body of
the municipality in which the delinquent taxpayer resides adopts a resolution
providing that interest shall not be charged to such a delinquent taxpayer if
payment of the property tax installment, less any available property tax credit
as defined in section 1 of P.L.2018, c.11 (C.54:4-66.6), is made on or before
the first day of the next calendar month from the date upon which it became
payable

����
(b)�� Interest shall not be
charged pursuant to this paragraph only if a delinquent property taxpayer
provides to the municipality proof that the delinquent property tax payment was
made in accordance with the conditions in subsubparagraphs (i) through (iii) of
this paragraph

����
(c)�� The municipal clerk
shall notify the Director of the Division of Local Government Services in the
Department of Community Affairs of its adoption of a resolution effectuating
the provisions of paragraph (5) of this subsection not later than the third
business day next following the municipal governing body's adoption of the
resolution.� If the municipality is under State supervision pursuant to the
provisions of Article 4 of the "Local Government Supervision Act
(1947)," P.L.1947, c.151 (C.52:27BB-54 et seq.), is subject to the
provisions of the "Municipal Rehabilitation and Economic Recovery
Act," P.L.2002, c.43 (C.52:27BBB-1 et al.), or is otherwise subject to a
memorandum of understanding or similar agreement with the division as a
condition of receiving supplemental State aid, the resolution shall not be
effective unless it is approved by the director.

���� b.��� At any time when the
governing body changes the rate of interest to be charged for delinquent taxes,
assessments, or other municipal charges, or to be charged for the end of the
year penalty, pursuant to subsection a. of this section, the governing body,
after adoption of a resolution changing the rate of interest, shall provide a
notice to all taxpayers, prior to the date that taxes are next due or with the
tax bill, stating the new rate or rates to be charged, the date that the new
rate or rates take effect, and, if the new rate or rates of interest are not to
be effective for the remainder of the tax year, the property tax quarter or
quarters for which the change in rates shall apply.� The notice may be separate
from the tax bill.� A change in the rate of interest or the end of year penalty
shall not take effect until the required notice has been provided in accordance
with this subsection.� To satisfy the notice requirement in this subsection,
the governing body shall post the notice on its municipal bulletin board; post
the notice on its municipal Internet webpage; publish the notice in its
official newspaper; provide a notice to all taxpayers by either (1) regular
mail; or (2) by a telephonic system and issue the notice by one of the
following alternatives: electronic mail, text messaging system, or any other
digital platform used by the municipality to disseminate information to public
residents electronically.

���� c.���� In municipalities that
have sold their property tax levy pursuant to section 16 of P.L.1997, c.99
(C.54:5-113.5), the rate of interest to be charged for the nonpayment of taxes,
assessments or other municipal liens or charges shall be the same interest or
delinquency rate or rates otherwise charged by the municipality, to be
calculated from the date the tax was payable until the date of actual payment
to the tax collector.� The purchaser of the total property tax levy shall be
paid only those amounts attributable to properties included in the total
property tax levy purchase and actually collected by the tax collector and
which amounts shall not include any delinquent interest collected by the
municipal tax collector prior to the time that the total property tax levy
purchaser makes the levy payment to the municipality.

���� d.��� Whenever the time period
for a property tax installment payment has been extended pursuant to the
provisions of subsection a. of this section, the Director of the Division of
Local Government Services in the Department of Community Affairs may, by temporary
order, extend the dates for payment of taxes by a municipality due to a county
pursuant to R.S.54:4-74, any school district pursuant to R.S.54:4-75, and any
other taxing district as provided by law.

���� "Delinquency" means
the sum of all taxes and municipal charges due on a specific real property,
less the amount of applicable property tax credit as defined in section 1 of
P.L.2018, c.11 (C.54:4-66.6), covering any number of quarters or years.� The
property shall remain delinquent, as defined herein, until such time as all
unpaid taxes, including subsequent taxes and liens, together with interest
thereon shall have been fully paid and satisfied and all applicable property
tax credit, as defined in section 1 of P.L.2018, c.11 (C.54:4-66.6), has been
credited.� The delinquency shall remain notwithstanding the issuance of a
certificate of sale pursuant to R.S.54:5-32 and R.S.54:5-46, the payment of
delinquent tax by the purchaser of the total property tax levy pursuant to
section 16 of P.L.1997, c.99 (C.54:5-113.5) and for the purposes of satisfying
the requirements for filing any tax appeal with the county board of taxation or
the State tax court.� The governing body may also fix a penalty to be charged to
a taxpayer with a delinquency in excess of $10,000 who fails to pay that
delinquency as billed, less the amount of applicable property tax credit as
defined in section 1 of P.L.2018, c.11 (C.54:4-66.6), prior to the end of the
fiscal year.� If any fiscal year delinquency in excess of $10,000 is paid by
the holder of an outstanding tax sale certificate or a total property tax levy
purchaser, the holder or purchaser, as appropriate, shall be entitled to
receive the amount of the penalty as part of the amount required to redeem such
certificate of sale providing the payment is made by the tax lien holder or tax
levy purchaser prior to the end of the fiscal year.� If the holder of the
outstanding tax sale certificate or the levy to the end of the fiscal year, then
the holder or purchaser shall be entitled to a pro rata share of the
delinquency penalty upon redemption, and the balance of the penalty shall inure
to the benefit of the municipality.� The penalty so fixed shall not exceed 6%
of the amount of the delinquency with respect to each most recent fiscal year
only.

(cf:� P.L.2020, c.34, s.10)

���� 2.��� This act shall take
effect immediately and shall apply to any property tax payments due after 90
days following the effective date of this bill.

STATEMENT

���� This bill would permit the
governing body of a municipality to adopt a resolution waiving interest on a
delinquent property tax payment by a taxpayer under certain circumstances.�
Specifically, this bill would allow a municipality to waive the assessment of
interest if a paper check, delivered by mail and postmarked one day prior to
the property tax due date, arrives past that due date as a result of
mishandling by the postal service.

���� Under current law, property
tax payments made by paper check are not considered delinquent if they are
received by the tax office by the tenth day of the month in which the payment
is due.� Any property tax payments received after the conclusion of this grace
period are considered delinquent, even if the payment was sent by mail and
postmarked prior to the property tax payment�s due date.

���� Under the bill, a municipality
would be given the discretion to waive interest charges assessed against a
delinquent taxpayer if:

���� (1)�� a paper check for a
property tax installment was mailed by the taxpayer using the United States
Postal Service in an envelope postmarked at least one calendar day prior to the
first day of the month of the property tax quarter in which the delinquent
property tax payment was due and payable;

���� (2)�� the envelope in which
the paper check was mailed was correctly addressed to the municipal tax
collector or other entity that is authorized to receive property tax payments;

���� (3)�� the paper check was not
delivered to the tax collector prior to the last day of the grace period
provided by the municipality for property tax payments; and

���� (4)�� the governing body of
the municipality in which the delinquent taxpayer resides adopts a resolution
providing that interest would not be charged to the delinquent taxpayer if
payment of the property tax installment is made on or before the first day of
the next calendar month from the date upon which it became payable.

���� Interest could not be waived
under the bill unless the governing body of a municipality receives proof from
the taxpayer that mailing of the paper check for the paper check was done in
accordance with the conditions set out in the bill.