Richmond County Tax Commissioner Steven Kendrick went to the airport last week to catch a plane – or two.
Kendrick wasn’t looking for a flight. He was trying to prevent one.
He and other officials descended on an airport hangar Thursday evening with chains and writs of execution for the seizure of two aircraft operated by Med-Trans, the Texas-based air ambulance company that acquired AirMed last year.
They found one plane, chained the front landing gear and posted a notice requiring immediate payment for its outstanding personal property tax debt – about $97,000, Kendrick said.
The seizure of assets was part a renewed effort by tax officials to collect more than $1.2 million in personal property taxes owed by Augusta businesses.
Kendrick said his office had been working to get the company’s tax debt satisfied for months without much luck. He said Med-Trans contended it was exempt from county taxes, as a regulated air carrier.
According to Georgia law, however, Med-Trans does not qualify under the exemption with the Department of Revenue, which taxes airlines as public utilities, Kendrick said.
Letters and phone calls hadn’t been successful in collecting the debt. Seizing the plane, however, got a different reaction.
“We were wired the money the next day,” he said.
Phone calls seeking comment from Med-Trans were not returned Wednesday.
The seizure of the Med-Trans plane, while effective, isn’t how tax officials want to handle these types of debts, said Chief Deputy Tax Commissioner Chris Johnson.
“We don’t want to interrupt businesses,” Johnson said. “They’ve got employees, they’ve got suppliers. There are a lot of ripple effects when you do that.”
Johnson said the tax commissioner’s office tries to work with businesses that fall behind on taxes to settle debts before they grow larger from penalties and interest.
“We don’t want it to get to the point where the debt is unpayable,” he said.
As of Wednesday, there were about 636 delinquent personal property tax accounts in Richmond County. Of that number, about 240 were more than a year past due, Johnson said. Of those, about 17 companies owed more than $10,000 in taxes and penalties, he said.
Businesses are required to file taxes on personal property, which includes inventory, machinery and other equipment used in operations. Unlike real estate taxes, however, personal property is mobile, which can make it difficult to assess and collect.
“A house don’t move,” Johnson said.
The tax commissioner can place liens on business assets as a way to force the payment of debt, but if the assets disappear, a lien has little real power.
Johnson said they suspect some businesses have moved personal property to avoid paying taxes, but it is difficult to prove.
Even if tax officials are successful in seizing such assets, that can create another set of problems. A warehouse full of business inventory, whether it is toilet paper or gold watches, has to be stored and protected until the debt is settled or the property is liquidated.
That’s another reason tax officials prefer settling debts over seizing property.
Of the overdue accounts, about $258,000 is considered “insolvent,” meaning it will never be collected, Johnson said.
“These businesses are probably not doing business anymore,” he said.
Johnson said they don’t want that number to grow. He said their office is going to great lengths to contact every business with an overdue bill and work with them to settle their debts.
“If it is a big bill now, it’s not going to stop accruing interest,” he said. “We don’t want it to get any bigger.”