City of Alexandria, Virginia
________________
MEMORANDUM
DATE: NOVEMBER 6, 2025
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
THROUGH: JAMES F. PARAJON, CITY MANAGER
FROM: KEVIN C. GREENLIEF, DIRECTOR OF FINANCE
DOCKET TITLE:
TITLE
Collection of Taxes and Annual Consideration of Authorization to Write-Off Property Tax Balances of Less Than Twenty Dollars.
BODY
__________________________________________________________________
ISSUE: Requesting City Council authorization to write-off balances less than twenty dollars, and to destroy records pursuant to State law.
RECOMMENDATION: That City Council:
(1) Receive the listings of delinquent local property taxes;
(2) Authorize the Director of Finance to write-off uncollected tax balances for tax year 2024 less than twenty dollars each, totaling $6,997 as of June 30, 2025, for which the Director of Finance has determined that the cost of collecting such balances would exceed the recoverable amount, provided that the Director of Finance will not include any balance for which he has reason to believe the taxpayer has intentionally paid less than the amount due and owed; and
(3) Authorize the Director of Finance to destroy records associated with taxes paid in calendar year 2019 and prior years in accordance with Code of Virginia §58.1-3129(A).
BACKGROUND: Pursuant to §58.1-3924 of the Code of Virginia, the Director of Finance annually maintains lists of delinquent Real Estate taxes, Personal Property taxes (Car Tax), and Business Personal Property taxes as of the end of the fiscal year. These lists are available for public inspection upon appointment in the Director of Finance’s Office.
Section 58.1-3129 of the Code of Virginia also states that, “The treasurer may, with the consent of the governing body, destroy all paid tax tickets at any time after five years from the end of the fiscal year during which taxes represented by such tickets were paid, in accordance with retention regulations pursuant to the Virginia Public Records Act (§ 42.1-76 et seq.).” In accordance with this section, the Director of Finance seeks City Council’s permission to destroy records pertaining to taxes paid for calendar year 2019 and prior years.
DISCUSSION: The Finance Department has compiled five lists of various categories of delinquent City taxes and associated penalties, interest and fees.
Summary data for Lists 1 through 3 can be found in Table I. Summary data for Lists 4 and 5 can be found in Table II.
List 1 Listing of Real Estate Taxes for Tax Years 2020 through 2024 delinquent as of June 30, 2025.
List 2 Listing of Individual and Business Personal Property Taxes (Car Tax) for Tax Years 2020 through 2024 delinquent as of June 30, 2025.
List 3 Listing of Business Personal Property Taxes for Tax Years 2020 through 2024 delinquent as of June 30, 2025.
List 4 Listing of Delinquent and Uncollected Individual and Business Personal Property Taxes (Car Tax) for Tax Year 2024 amounting to less than twenty dollars as of June 30, 2025.
List 5 Listing of Uncollected Business Personal Property Taxes for Tax Year 2024 amounting to less than twenty dollars as of June 30, 2025.
Table I
Delinquent Real Estate and Personal Property Taxes for Tax Years 2020-2024
As of June 30, 2025
(Amounts in millions)
Tax Taxes Percentage Taxes Total
List Tax Type Levied Collected Collected Due Due
1 Real Estate $2,479.3 $2,476.5 99.9% $ 2.8 $ 3.2
2 Vehicle Personal $ 359.6 $ 346.3 96.3% $13.2 $18.4
Property (Car Tax)
3 Business Personal $ 90.1 $ 87.9 97.6% $ 2.2 $ 3.1
Property
TOTAL: $2,928.9 $2,910.7 99.4% $18.2 $24.6
Table II
Delinquent Personal Property Taxes for Tax Year 2024
As of June 30, 2025
Tax Amounts less than $20
Total Number of Average
List Tax Type Tax Due Taxpayers Balance Due
4 Car Tax $ 749 75 $ 9.98
5 Business Tangible
Personal Property $ 6,249 897 $ 6.97
TOTAL $ 6,997 972 $ 7.20
Summary of Real Estate Tax Collection Statistics: As displayed in Table I, the Finance Department has collected approximately $2.476 billion, or 99.9 percent, of the real estate taxes levied for tax years 2020 through 2024. The “Top Twenty” delinquent real estate taxpayers comprise $1.35 million or 42 percent of the total outstanding delinquency (Attachment I).
The Finance Department uses a variety of tools to monitor and collect delinquent taxes. These tools may include delinquency notifications and summons notices issued to delinquent taxpayers, as well as rent liens, bank liens, wage liens, and Circuit Court judgments placed against property owners. The Department places delinquent Real Estate tax accounts with the City’s third-party collection attorneys, Taxing Authority Consulting Services, PC (TACS). This initiative is an efficiency measure designed to ensure maximum coverage of delinquent accounts and outsource this workload from the City Attorney’s Office. This added effort is at no cost to the City as the delinquent taxpayer is responsible for collection costs as authorized by State law. TACS collected $3.0 million for the City in FY 2025. The Department of Finance will also occasionally utilize the expertise of TACS to assist in the collection of particularly difficult cases involving other tax types, such as business licenses or trustee taxes as necessary.
The City uses the litigation option cautiously because collection can often be achieved through other means, however auctions can occur. Merely initiating the judicial sale process often incentivizes either the property owner or the mortgage holder to pay the taxes due. Real estate taxes on a property must be delinquent for three years before a Virginia locality can begin judicial proceedings. In the interim, TACS is an excellent resource to encourage delinquent taxpayers to begin the payment process, establish payment plans, and avoid litigation. Staff also promotes Tax Relief for the Elderly and Disabled to ensure property owners are aware of the program. The Department of Finance also coordinates with the Office of Housing and the Department of Community & Human Services as appropriate in cases of particular need.
Ample advance notice is given to taxpayers before outsourcing to TACS in order to encourage them to avoid additional costs and aggravation. The Department of Finance maintains complete oversight of the collection program, and TACS works closely with both the Department of Finance and the City Attorney’s Office. While pursuing statutory collections, staff continues to utilize compassionate, customer-focused payment plans whenever possible.
To preserve the City's interest in the collection of delinquent real estate taxes, Virginia Code §58.1-3340 provides that a priority lien is automatically placed (by operation of law) on property with outstanding real estate taxes. This tax lien is a claim by the City for payment of the tax debt and begins on the day following the payment due date. The lien is recorded against delinquent properties on the City's computerized Real Estate system pursuant to Virginia Code § 58.1-3930, and remains in effect until the outstanding taxes, penalties and interest have been paid in full. The statutory lien ensures that the City will collect any delinquent real estate taxes when the owner sells the property or applies for a mortgage. This includes delinquent Stormwater Management Fees. Pursuant to Section 5-6-237(C) of the Code of the City of Alexandria, delinquent Stormwater Management Fees “constitute a lien on the property ranking on parity with liens for unpaid taxes and shall be collected in the same manner as provided for the collection of unpaid taxes.” Virginia law allows staff to pursue delinquent real estate taxes for a period of 20 years.
Summary of Vehicle Personal Property Tax Collection Statistics: As shown in Table I, the Finance Department has collected $346.3 million, or 96.3 percent, of the vehicle personal property taxes levied for Tax Years 2020 through 2024. Because a relatively large portion of the City’s population is very transient, collecting personal property taxes on vehicles is far more challenging than collecting real estate taxes.
Once taxes have been delinquent for three months, accounts are placed with the department’s private collection agency for Personal Property, Nationwide Credit Corporation (NCC). Similar to TACS, this outsourcing is at no cost to the City as the delinquent taxpayer is responsible for NCC’s 20% collection fee, as authorized by Va. Code § 58.1-3958.
In FY 2025, NCC collected $2.4 million in delinquent Car Taxes for the City. Of this amount, approximately $0.5 million was for tax year 2024, and $1.9 million was for prior tax years. Again, taxpayers are given ample opportunity to avoid the added costs and hassle of delinquent collections as the Department of Finance sends appropriate warning letters in advance of placement. Staff is also liberal in its use of extended payment plans. Pursuant to the Code of Virginia, the statute of limitations for the collection of delinquent Car Taxes is five years, except in cases where the taxes have been reduced to judgment. Typically, however, older debt is harder to collect.
In addition to collections, staff employs a discovery process to guard against tax evasion. Under this program, the Department of Finance undertakes weekly computer matching to records of the Virginia DMV. Staff also researches vehicle information from field discovery efforts, apartment tenant lists, and reports from the public concerning vehicles with out of state license plates to ensure compliance with Personal Property tax law.
Summary of Business Personal Property Tax Collection Statistics: As shown in Table I, the Finance Department has collected $87.9 million, or 97.6 percent, of the business personal property taxes levied for Tax Years 2020 through 2024. As allowed by Virginia law, the delinquent amount includes statutory assessments made on the best information available pending the filing of timely tax returns. Staff works with businesses throughout the year to obtain returns, and to adjust and collect the appropriate amounts. Staff also places delinquent Business Personal Property taxes with NCC, collecting $167,528 in FY 2025. The statute of limitations for collection is five years.
FISCAL IMPACT: Staff efforts resulted in the collection of approximately $14.8 million in delinquent taxes, penalties, and interest in FY 2025. The Department of Finance anticipates collecting a similar amount in FY 2026.
ATTACHMENTS:
Attachment 1: Top Twenty Delinquent Real Estate Taxpayers for Tax Years 2024 and Prior
STAFF:
Kevin C. Greenlief, Director, Department of Finance
Laura Gates, Deputy Director, Department of Finance
Lashonda Mitchell, Assistant Director, Revenue Division, Department of Finance
Kenneth Acoff, Jr., Manager, Discovery & Collections, Revenue Division, Dept. of Finance