The September and October penalties are applied to the portion of unpaid taxes for the current 2020 year. The January rate is applied to the total outstanding balance of all taxes owing.
Property Owner A does not pay his 2020 taxes. What are the applicable penalties for the 2020 year?
2020 tax levy = $3,100. This levy is due June 30th, 2020. No payments are made in 2020.
On September 1st, 2020 a penalty is applied. Unpaid taxes ($3,100) x 2% = $62 penalty.
On October 1st, 2020 a penalty is applied. Unpaid taxes ($3,162) x 2% = $63 penalty.
On January 1st, 2021 a penalty is applied. 2020 outstanding balance ($3,100+$62+$63) = Total outstanding balance of $3,225 x 10% = $323 penalty.
Property Owner B did not pay his 2020 taxes on June 30th, 2020 but made the payment in full prior to September 1st, 2020 :
2020 tax levy = $3,100. This levy is due June 30th 2020. No payments are made until August 31st, 2020.
On August 31st, 2020, a payment of $3,100 is made to the Town. All of the taxes were paid prior to September 1st and are not subject to penalty.