50 U.S.C. § 3991: Taxes respecting personal…

Summary

If a service member owes a tax or assessment (not a personal income tax) on personal things like cars, or on land or buildings they, their dependents, or employees live in or use for work or farming, and the tax was due before or during their military service, special protections apply. Tax collectors can't sell that property to collect the debt unless a court orders the sale and finds that military service does not significantly limit the person’s ability to pay. A court can pause the collection case or sale while the person is in service and for up to 180 days after they leave service. If the property is sold or forfeited to collect the tax, the service member has the right to get it back or start a case to get it back during service or within 180 days after leaving service; this does not shorten any longer state redemption period. The unpaid tax will earn interest at 6 percent per year until it is paid, and no extra penalties or interest can be added for not paying. These rules apply whether the service member owns the property alone or together with dependents.

Title 50, §3991

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(a)Application

This section applies in any case in which a tax or assessment, whether general or special (other than a tax on personal income), falls due and remains unpaid before or during a period of military service with respect to a servicemember’s—

(1)personal property (including motor vehicles); or

(2)real property occupied for dwelling, professional, business, or agricultural purposes by a servicemember or the servicemember’s dependents or employees—

(A)before the servicemember’s entry into military service; and

(B)during the time the tax or assessment remains unpaid.

(b)Sale of property

(1)Limitation on sale of property to enforce tax assessment

Property described in subsection (a) may not be sold to enforce the collection of such tax or assessment except by court order and upon the determination by the court that military service does not materially affect the servicemember’s ability to pay the unpaid tax or assessment.

(2)Stay of court proceedings

A court may stay a proceeding to enforce the collection of such tax or assessment, or sale of such property, during a period of military service of the servicemember and for a period not more than 180 days after the termination of, or release of the servicemember from, military service.

(c)Redemption

When property described in subsection (a) is sold or forfeited to enforce the collection of a tax or assessment, a servicemember shall have the right to redeem or commence an action to redeem the servicemember’s property during the period of military service or within 180 days after termination of or release from military service. This subsection may not be construed to shorten any period provided by the law of a State (including any political subdivision of a State) for redemption.

(d)Interest on tax or assessment

Whenever a servicemember does not pay a tax or assessment on property described in subsection (a) when due, the amount of the tax or assessment due and unpaid shall bear interest until paid at the rate of 6 percent per year. An additional penalty or interest shall not be incurred by reason of nonpayment. A lien for such unpaid tax or assessment may include interest under this subsection.

(e)Joint ownership application

This section applies to all forms of property described in subsection (a) owned individually by a servicemember or jointly by a servicemember and a dependent or dependents.

Notes & Related Subsidiaries

Editorial Notes

Codification Section was formerly classified to section 561 of the former Appendix to this title prior to editorial reclassification and renumbering as this section.

Prior Provisions

A prior section 501 of act Oct. 17, 1940, ch. 888, art. V, 54 Stat. 1187, related to rights in public lands and grazing lands, prior to the general amendment of this Act by Pub. L. 108–189. See section 3992 of this title. Provisions similar to this section were contained in section 500 of act Oct. 17, 1940, ch. 888, art. V, 54 Stat. 1186; Oct. 6, 1942, ch. 581, § 14, 56 Stat. 776, prior to the general amendment of this Act by Pub. L. 108–189.

Statutory Notes and Related Subsidiaries

Effective Date

Section applicable to any case not final before Dec. 19, 2003, see section 3 of Pub. L. 108–189, set out as a note under section 3901 of this title.

§3991 Taxes Respecting Personal Property, Money, Credits, and Real Property