A Notice of State Tax Lien is a public claim against a taxpayer's property or rights to property, both owned at the time the lien is filed and acquired after the lien is filed. Examples include the taxpayer's home, other real estate, boats, accounts receivable, etc. The Notice of State Tax Lien is filed in the county where the taxpayer's business or residence is located or in the county where the taxpayer has an interest in property and serves as both a public notice to the taxpayer's creditors and to establish priority status among the creditors.
Three requirements must be met before the Department of Revenue files a Notice of State Tax Lien:
- A Notice of Tax Due (a tax bill) has been prepared either because the taxpayer has filed but not paid the correct amount of tax liability or through an audit or assessment for non-filing of a return.
- The Notice of Tax Due has been mailed to the taxpayer, demanding payment.
- The taxpayer has neglected or refuses to pay the full amount of tax, penalty, interest, and fees due.
Taxpayers should be aware that once filed, a lien might harm their credit rating. Federal law allows a consumer-reporting agency to retain and report the Notice of State Tax Lien for seven years after the tax liability has been paid.
To avoid the issuance of a Notice of State Tax Lien, the taxpayer should either pay the tax liability in full at the time of notice or contact the Department of Revenue immediately to negotiate a satisfactory payment agreement. It should be noted that depending on several factors, including the amount of the debt and the tax history, a lien might still be filed against the taxpayer under a payment agreement.
Copies of tax liens can be obtained from the county court clerk in the county where the lien is filed.
Inquire about a Notice of State Tax Lien
Click here for Lien Subordination
Click here for Specific Lien Release