Property Tax Delinquency and the Number of Payment Installments

Abstract

At a time when property tax delinquencies are rising and property tax revenues are falling in many parts of the United States, it is especially important to consider the potential impact that property tax administration has on reducing delinquency. In particular, reducing the amount of money a taxpayer must pay at any given time may reduce the rate of property tax delinquency. This study investigates the relationship between the number of annual payment installments and the property tax delinquency rate using a random effects regression model and five years of data from Wisconsin municipalities. The results of the analysis indicate that increasing the number of installment payments from two to three per year reduces the delinquency rate by about one third. Allowing more than three installments, however, does not lead to a statistically significant reduction in the property tax delinquency rate.