This is the time of year when Andover taxpayers, myself included, start wondering what the tax rate will be for this year and when the tax bills will arrive in the mail. It’s always a bit of a guessing game for us in the Town Office, because the tax rate isn’t set by us – it’s set by the New Hampshire Department of Revenue Administration (DRA). DRA has to set the tax rate not just for Andover, but for all 234 New Hampshire towns and all 13 New Hampshire cities.
DRA’s rate-setting process combines information from reports filed by Town Offices with information from the New Hampshire Department of Education and from each town’s respective county. DRA tries to start setting rates on October 1 each year, but sometimes that may get delayed by a few days.
Delays Cause Problems
A significant delay in setting tax rates can cause big problems for towns like Andover. As the end of the year approaches, we’ve spent most of the money we borrowed earlier in the year “in anticipation” of the tax revenue we know we’ll collect late in the year when the tax bills go out. But until our tax rate is set, we can’t send out tax bills. And if tax bills don’t go out on time at the end of the year, then we could run out of the money we’ve borrowed, which would make paying the Town’s bills in December very difficult.
I have to report that the tax-rate-setting process got off to a very rough start this year. On October 2, (a day after DRA should have started setting the tax rates), DRA notified all the towns and cities in New Hampshire that the rate-setting process would not even start until after November 7. That meant that we might not have received our Andover tax rate for 2013 until late November or even early December.
Even if we got the tax bills out almost immediately after receiving our tax rate, the tax bills still wouldn’t be due for 30 days (late December or early January). Where would we have gotten the cash to pay the Town’s ordinary December invoices and payroll, let alone Andover’s $752,807 tax bill (with 10% interest for late payment) that we owe to Merrimack County by December 17?
Towns and Cities Rise Up
Clearly, the DRA’s plan was unacceptable, not just to me but to town administrators and city managers across the state. We immediately contacted the Governor’s office and our state representatives and state senators and voiced our strong concerns about the delay. Within 24 hours, the DRA and the Department of Education reached a compromise that will allow tax rate setting to begin on October 22 – late, but hopefully not disasterously so.
There are still 234 towns and 13 cities that need to have their rates set, but the Andover Town Office is doing everything it can to get Andover to the front of the line. (And no, the DRA does not set the rates in alphabetical order – drat!) However, there is no guarantee that we will be one of the first towns to have its rate set.
We will print and mail the tax bills as soon as DRA sets Andover’s rate. As always, taxes are due 30 days after the date of the bill.
Avoiding a Big Tax Payment
Looking ahead to next year, you can avoid the inconvenience of having to make one large annual tax payment at the end of the year by making smaller “guesstimated” payments any time during the year. There are no forms to fill out, and no rules to follow. You pick how much to send, and when. Just send your check to the Andover Tax Collector with your Map, Lot, and Sub in the Memo line, and Joanna will apply it to your account. Whatever you pay during the year will be shown on (and reduce the balance owed on) your tax bill at the end of the year.