$11 million in delinquent Knox County property taxes

6 Investigates $11 million in delinquent Knox County property taxes

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Gene Howerton (front) owes more than $107,000 dating back to 2009. Gene Howerton (front) owes more than $107,000 dating back to 2009.
Knox County Trustee Craig Leuthold said field collectors try to work with property owners before the debt piles up. Knox County Trustee Craig Leuthold said field collectors try to work with property owners before the debt piles up.
Hillwood Villas, LLC owns four properties that are part of the upcoming Knox County tax sale for now. Hillwood Villas, LLC owns four properties that are part of the upcoming Knox County tax sale for now.
Concord Yacht Club owes more than $167,000 in unpaid property taxes, but the nonprofit is challenging that balance. Concord Yacht Club owes more than $167,000 in unpaid property taxes, but the nonprofit is challenging that balance.

By SAMANTHA MANNING
6 News Reporter

KNOXVILLE (WATE) - Property tax collections are up more than $7 million this year over last year as of February in Knox County, but there are still around $11 million in unpaid property taxes that need to be collected.

Money from property taxes in Knox County goes towards maintaining public services including parks and libraries.

6 News worked for weeks searching through 2,078 pages of public records to narrow down some of the top offenders.

Delinquent Property Owners

Gene Howerton owes more than $107,000 dating back to 2009.

6 News found him at one of his properties on Clinton Highway, but he refused to answer our questions.

Knox County Trustee Craig Leuthold said field collectors try to work with property owners before the debt piles up.

"We do accept payment plans," Leuthold said. "People can sign up on a payment plan. We take part payments. We can even set it up on a bank draft where it'll come directly out of your checking account each month."

If properties are more than three years delinquent, they risk being auctioned in the city or county tax sale.

Eight of Howerton's properties are, for now, expected to be put up for auction.

Putting properties into a tax sale comes at a cost to the county, requiring $2,000 of taxpayer money just to put a piece of property in a sale. The county also has to spend money on public ads about the auction.

"We have to make sure we do all these steps and it is very costly," Leuthold said. "The last thing we want to do is sell their property."

Hillwood Villas, LLC owns four properties that are part of the upcoming Knox County tax sale for now.

The owners owe just more than $189,000 in property taxes.

6 News tried reaching out to the owners but never heard back.

We asked the Knox County law department what this means for residents living in those apartments and Deputy Law Director Daniel Sanders said if an owner purchases land during a tax sale, a chancery court is responsible for making decisions on things like tenants and leases. They hold hearing for "equitable considerations."

"I feel like that's really unfair," former Hillwood Villas resident Brooke Rigsby said.

6 News met Rigsby as she was moving out of her Hillwood Villas Apartment.

Rigsby said she knew nothing about the property owners' history of delinquent taxes and worries about the uncertainty left for residents still living there.

"They should at least get some kind of warning right now," Rigsby said. "These are people that pay good money to live somewhere."

Not all properties with outstanding debt are up for auction.

Concord Yacht Club owes more than $167,000 in unpaid property taxes, but the nonprofit is challenging that balance.

According to appeal records with the State Board of Equalization, Concord Yacht Club argues the property is used as a public recreational park and should be exempt from assessment and taxation.

Concord Yacht Club was not taxed until 2010, but the Knox County Property Assessor's office tells 6 News that was all because of an error under the former administration.

The Property Assessor's office said in 2010, the county corrected its mistake and listed Concord Yacht Club as a taxed commercial property.

Concord Yacht Club is appealing that status and the appeal is pending before the State Board of Equalization.

"Their taxes and penalty interest are piling up on them and we'll just have to wait and see what that outcome is from the state," Leuthold said.

Property owners can pay off their debt leading up to a tax sale and have their properties taken out of the auction but if property taxes are paid late by even a single day, anon-waivable penalty of .5% and interest of 1% are due, and accrue again on thefirst day of each subsequent month until the tax is paid, according to the Tennessee Comptroller of the Treasury's Office.

Once suit is filedto collect the tax, an additional ten percent charge is added for thedelinquent attorney, plus court costs. 

A property owner who wants to fulfil the debt before the tax sale, or get the tax lien released so they can sell theproperty, or who want to redeem the property after the tax sale, must pay allthese accumulated costs.


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