Section 906 Orders Revisited

Training for: Legal Notes

Question: We heard recently about a town adopting a policy to allow the tax collector to apply real estate tax payments to unpaid personal property taxes. Is this permissible?

Answer: No. Maine law authorizes the municipal officers (selectmen or councilors) to adopt an order requiring the tax collector and treasurer to apply tax payments to the oldest unpaid tax on the property for which payment was tendered. But this law does not permit real estate tax payments to be applied to unpaid personal property taxes. Nor does it allow a tax payment made on one property to be applied to another property.

The law we’re referring to of course is 36 M.R.S.A. § 906, which accounts for the title commonly given to these orders. A “Section 906 Order” prevails regardless of the taxpayer’s directions or intent. It applies to both real estate and personal property taxes, but as we said, it applies only to the property for which payment was tendered. It also applies whether taxes have been liened or not, so it can be very helpful where an older tax was not liened for some reason and the taxpayer is thus unmotivated to pay it.

For more on Section 906 Orders, see “Section 906 Orders & Unpaid Property Taxes,” Maine Townsman, Legal Notes, April 2015.

For a sample Section 906 Order, see Appendix 1 of MMA’s Tax Collectors & Treasurers Manual, available free to members at www.memun.org. (By R.P.F.)

Question: We heard recently about a town adopting a policy to allow the tax collector to apply real estate tax payments to unpaid personal property taxes. Is this permissible?

Answer: No. Maine law authorizes the municipal officers (selectmen or councilors) to adopt an order requiring the tax collector and treasurer to apply tax payments to the oldest unpaid tax on the property for which payment was tendered. But this law does not permit real estate tax payments to be applied to unpaid personal property taxes. Nor does it allow a tax payment made on one property to be applied to another property.

The law we’re referring to of course is 36 M.R.S.A. § 906, which accounts for the title commonly given to these orders. A “Section 906 Order” prevails regardless of the taxpayer’s directions or intent. It applies to both real estate and personal property taxes, but as we said, it applies only to the property for which payment was tendered. It also applies whether taxes have been liened or not, so it can be very helpful where an older tax was not liened for some reason and the taxpayer is thus unmotivated to pay it.

For more on Section 906 Orders, see “Section 906 Orders & Unpaid Property Taxes,” Maine Townsman, Legal Notes, April 2015.

For a sample Section 906 Order, see Appendix 1 of MMA’s Tax Collectors & Treasurers Manual, available free to members at www.memun.org. (By R.P.F.)