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Posted by Jim George, Wiscasset, November 29, 2005:Our town recently changed from once a year tax collection to twice a year tax collection.  We are getting a lot of requests from tax payers wanting us to refund the 2nd half payment if a bank or escrow company pays it early.  How do some of you handle requests from taxpayers for refunds when the 2nd payment is paid before the due date?  We are not talking overpayments, just an early payment.

Responses:

We did up a policy that says that any overpayments/prepayments are applied to the next installment.  (Laurie Boucher, Richmond)

In Mariaville we offer the option of paying in two payments.  I do not recall anyone asking for a refund and I would not give one if asked.  If we were to return money it would go back to the bank or escrow company and let them resolve whether to return any to the homeowner.  Many people continue to pay in a single payment and if any of them could decide to ask for a refund for whatever reason or whim it would be a nightmare.  There is no formal policy about this as far as I know. (Mark Johnson, Mariaville)

I am not sure if this is correct but here in Rangeley we have a lot of sales where because of a June 30 fiscal year the payoffs do not cover the second half.  The title companies will only prorate to the end of the calendar year, not the end of the tax year.  When we receive the money for the whole tax year we will not pay it back as long as it comes from the bank or title co.  I feel that if it is paid by the title co. or bank, I do not have the authority to give the tax payer the money and also run the risk of them forgetting to pay it and then having to go through the lien process and people become upset.  Hope this helps. (Scott Gesualdi, Rangeley)

Following your scenario we would not issue a refund.  The property owner may actually be requesting something that would violate their escrow agreement (not that this is for you to enforce but......).  As a general rule unless an overpayment of the total amount due is made we do not issue a refund. (David Kinney, Lincolnville)

It is my understanding that the Tax Collector becomes personally responsible for any refunds of taxes due.  Since no one would ever accept that responsibility that the taxpayers would come back later and pay again, the answer is you can't refund it. (Peter Nielsen, Wilton)

Our policy in the Town of Lincoln is that a refund cannot be given unless there is an overpayment.  So the answer to your question is there would be no refund of the tax money if paid early by the mortgage company.  Also, another part of our policy is that the refund would be given back to the person or entity that paid the overpayment.  I hope this is helpful.  Also, if there is an overpayment make sure you contact the person making the payment to make sure that you can keep the overpayment, otherwise the Town will be required to pay interest on overpayments not designated as pre-payments.  See 36 MRSA Sections 506 and 506A. (Gilberte Mayo, Lincoln)

We will refund only to the payer who made the error. That is made with a written request only. Refinancing can cause the duplicate payment. (Eva Leavitt, Turner)

In Hallowell we do NOT refund early payments, because they are just that.  (Dawna Myrick, Hallowell)