February 5, 2004
TAX COLLECTOR’S OFFICE FILES MOTION TO RECEIVE BACK TAXES OWED BY U.S. AIRWAYS
Charlotte, NC - The Mecklenburg County Tax Collector’s Office has filed a motion in U.S. Bankruptcy Court to receive more than $6 million in back taxes from U.S. Airways.
The motion explains that the Tax Collector’s Office never received notice from U.S. Airways challenging the claims filed by the Tax Collector for taxes owed the City and County for the fiscal year 2002-2003.
County Attorney Marvin Bethune says the claims were filed in October 2002 and March 2003, and that the Tax Collector believed that the taxes would be paid in due course under the Plan of Reorganization filed by U.S. Airways.
“We never received notification that they were challenging the taxes,” Bethune said. “In December of last year, we began inquiring about when the payments would begin and found out then that the Court had entered an order denying the claims.”
Bethune says the Bankruptcy Court uses a mailing service to send notifications via first class mail. If the court does not receive a response to a challenge, Bethune says the Court assumes the creditor is willing to forgive the debt. In this instance, the Tax Collector did not receive notice of the challenge and is certainly not willing to forgive the debt.
“There is no indication Mecklenburg County ever received the notice or the ruling until the inquiry was made in December. And we are talking about a large legal document, not simply a letter,” Bethune explained. “We have received similar notifications in the past and never run into this problem before. We believe local taxpayers shouldn’t have to pay the price for something that was either inadvertently not mailed, or was lost in the mail.”
Since U.S Airways was under bankruptcy protection when the taxes accrued, it was unclear what, if any, property tax payments would be ordered by the Court. Therefore, neither the City of Charlotte nor Mecklenburg County included this tax revenue in their respective budgets.
U.S. Airways has since emerged from bankruptcy and has paid approximately $6.6 million in property taxes it owed this year.
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Media contact: Danny Diehl (O) 704-336-2084 (M) 704-572-1035 or