Investing in Collections Software to Allow for Monthly Property Tax Payments

Local governments across the United States rely on property taxes for a significant share of revenue. Administration of the property tax typically includes annual or semi-annual collection. This report surveys and interviews both software vendors and local governments to understand the costs, challenges, and benefits of switching to tax collection with monthly installment payments.

Software vendors, including Harris Govern, Thomson Reuters, Tyler Technologies, and GovTech Services have tax collection software systems that are capable of monthly property tax installments. Using this software, both large and small governments in the United States have offered property owners the option of making monthly tax payments.

GFOA examined the costs and effort of switching to monthly billing and collection. The costs vary greatly, depending on each government’s current situation. For governments currently using software products that have the capability to offer monthly property tax billing and collection, a switch would have minimal costs. Switching would involve software configurations that would require some consulting/training assistance and minor upgrades but no major software upgrades, implementations, or development work. (Note: GFOA did not evaluate additional costs for the ongoing administration of the monthly billing and collection. For example, going from semi-annual billing to monthly would result in sending six times more bills and processing six times more payments). However, governments that are currently using custom, home-grown tax collection systems will likely find that software was built with limited configuration options (or none). Any significant changes would require additional programming and/or development work, leading to significant costs and effort. In many cases, governments that built software many years ago are focused on maintaining it and may lack staff with the capacity or skills to undertake significant improvements.