Render Unto Caesar...

“The taxpayer must render unto Caesar what is Caesar’s, but no more.”

A month or so ago we got a ‘win’ at the Supreme Court, a unanimous decision that upheld a property owner’s assertion that when the county sold her property for $40,000 to pay for a $15,000 tax debt- the excess belonged to her, not the county.

That is a major win, but we’re not out of the woods yet in Arizona…

Let’s take a deeper look.

The Fifth Amendment:

“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

Embedded in this Amendment is the “Takings Clause”:

“nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

Two parts here-

One, we have to pay our taxes- if we don’t the county has a process (lawful) for taking the property to recoup the taxes that were supposed to be paid.

Two, not all states treat that property once it is taken the same way. Arizona is one of thirteen states that, more or less/paraphrased, essentially do not recognize the equity above and beyond the tax debt as private property.

Up until this ruling, in Arizona, the difference between the sale price of the home and the tax debt would belong to the County.

This was recognized as needing attention and an attempt to change the law was made- but failed. Arizona House Bill 2445 during the second regular session of the Fifty-Fourth Legislature sought to amend the law- “the foreclosure does not extinguish a property owner’s or lienholder’s interest on the surplus proceeds from the sale of the property”

But that bill failed…

Meaning, if something were to happen where taxes weren’t paid for an extended period of time, the County has-

1. A legal process for taking the property from you and selling it
2. Can keep all of the proceeds from the sale

While it is a big win to see the Supreme Court decide that the equity in the home is private property and therefore subject under the Fifth Amendment’s Takings Clause- our local Arizona law has to be modified.

The Supreme Court Decision, opinion delivered by Chief Justice Roberts who ultimately stated “The taxpayer must render unto Caesar what is Caesar’s, but no more.”
https://www.supremecourt.gov/opinions/22pdf/22-166_8n59.pdf

Arizona House Bill 2445 (that failed):
https://fastdemocracy.com/bill-search/az/54th-2nd-regular/bills/AZB00009869/

A good discussion video on the subject:
Home Equity Theft - Supreme Court Ruling
https://www.youtube.com/watch?v=odvmbZwsYVQ

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Be Good!
Curtis