Sacramento County is considering a way to allow property owners to pay property taxes in installments by credit or debit card using the platform of Sacramento startup company Smart Easy Pay.
If the plan is approved, the county would accept payments on behalf of taxpayers who volunteer to use Smart Easy Pay, which allows installment payments through the year.
“The idea was born out of two concerns,” said Alan Fernandes, CEO of Smart Easy Pay. “First, counties are prohibited from accepting partial payments. Second, late payment penalties are 10%.”
Counties collect property taxes that are due Dec. 10 and April 10, which coincide with holiday season spending and federal income tax deadlines.
“They are big bills to pay at times when people are spending a lot of money,” Fernandes said.
Smart Easy Pay allows property owners to pay in installments all year long, so it isn’t a big hit all at once.
Smart Easy Pay, which was founded in 2018, was developed by the California State Association of Counties Finance Corp. and spun out as a separate company. It is also supported by the National Association of Counties and the California School Boards Association.
The program was piloted in 2018 in San Luis Obispo County. Solano and Yolo counties were part of a later pilot program.
Sacramento would be the 12th county to approve the service. The item is on the consent calendar of the Sacramento County Board of Supervisors' Sept. 27 meeting, with a staff recommendation to approve it.
“There is no other product like this,” Fernandes said, adding that the company eventually plans to take the product nationally to the more than 3,000 counties in the country.
The product costs the counties nothing. Smart Easy Pay earns a small part of a 1.99% transaction fee, and it invests the money it holds through the year.
As the number of transactions scales up, Fernandes said the transaction fee could possibly go to nothing over time.
About 30% of property owners can already pay these taxes in installments through an impound account with an insurance or mortgage payment. But 70% of property owners have to come up with the two installment payments. State law doesn’t allow counties to collect property taxes in installments.
If Smart Easy Pay users pay off their credit cards monthly, they wouldn’t incur interest on the program. Also, bank statements tend to be easier records to access, so users can track their payments over time, Fernandes said.
The company has eight employees and offices in Sacramento.
Smart East Pay is also on the Nevada County Board of Supervisors' meeting agenda for Tuesday, and it will be heard in Orange County early in October. Fernandes anticipates getting all 58 California counties by the end of next year.
