Why Would You Have a State Tax Lien Put on You?

If you have delinquent state taxes such as property or income tax, the state can attach a lien to your property to satisfy the debt. A state tax lien is generally used as collateral for the debt.

Criteria

The state files a Notice of State Tax Lien after it has evaluated the tax, sent you a tax bill, and you did not pay the tax. Before filing the lien, the state generally sends you a final tax bill letting you know the tax amount, the due date and that a lien will be filed within a specific time frame.

Property

The state can put a lien against all your property, including your home and car plus all your rights to property such as your accounts receivables, if you are a businessperson.

Effect

A lien can negatively affect your credit score and make it hard for you to purchase a home or car in the future.

Withdrawal

A state tax lien can be withdrawn if you pay the tax debt, if the state made an error, and if the statute of limitations expires—10 years from the filing date.

Credit Removal

The state has no control over how long the lien remains on your credit report. If you have satisfied the lien and need to update your credit report, contact the credit bureaus.

Prevention/Solution

You can avoid a state tax lien by responding promptly to the notifications. If you cannot make the payment in full, contact your local Department of Revenue and make payment arrangements to satisfy the debt.

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