Developers top tax delinquencies list

(Deseret News) Nine of the 10 biggest property tax delinquents in Utah County have something in common this year: They are developers.

In fact, Deseret News analysis shows that developers, as a group, owe more than $2 of every $5 in late 2009 property taxes in that county. That is more than what all homeowners combined owe there. It is also more than what all other types of business combined owe there.

Why? Developers appear to be using nonpayment of taxes as a "cheap loan." It requires no application fee or waiting period, and does not require good credit. The cost is a 2 percent penalty, plus a comparatively low 6.25 percent interest rate this year. The amount must be paid off in five years, or the property is seized and auctioned.

"I know it's a cheap loan for developers," said Utah County Treasurer Robert C. Kirk, who adds that he doesn't see any way to stop the growing practice without hurting others.

He said even raising penalties or interest rates for developers "is not going to be a deterrent. They're not going to pay it until they sell their homes. They're going to pass on that cost when times get better. ... So ultimately, it (trying to raise taxes on developers) just ends up hurting the consumer anyway."

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