Editor’s note: This version of chapter 8 of this title is included here for reference only, as at the time of this codification the provisions of section 87, that set forth codified section 934 of PL 17-50, as amended by section 1 of PL 17-83, made this Act null and void.
Section 1 of PL 17-83 states:
Section 1. Section 934 of title 54 of the Code of the Federated States of Micronesia, as enacted by Public Law No. 17-50, is hereby amended to read as follows:
§ 934. If any of the four states of the Federated States of Micronesia have not passed into law value added tax legislation as of midnight July 19, 2013, this act is null and void.
PL 17-83 was signed into law by Vice President Alik L. Alik on April 19, 2013.
SUBCHAPTER VI
Levy and Execution
[FOR REFEREENCE ONLY]
SECTIONS
§ 834. Tax as lien on property.
§ 835. Warrant for collection of tax; issuance; effect; levy and sale.
§ 836. Surrender of property subject to levy; penalty and notice.
§ 837. Notice of sale; redemption.
§ 838. Sale; delivery of bill of sale; disposition of unsold portion.
§ 839. Proceeds of levy and sale.
Editor’s note: This version of chapter 8 of this title is included here for reference only, as at the time of this codification the provisions of section 87, that set forth codified section 934 of PL 17-50, as amended by section 1 of PL 17-83, made this Act null and void.
Section 1 of PL 17-83 states:
Section 1. Section 934 of title 54 of the Code of the Federated States of Micronesia, as enacted by Public Law No. 17-50, is hereby amended to read as follows:
§ 934. If any of the four states of the Federated States of Micronesia have not passed into law value added tax legislation as of midnight July 19, 2013, this act is null and void.
Section 31 of PL 17-50 added a subchapter VI of chapter 8 entitled Levy and Execution.
(1) If any taxpayer neglects or refuses to pay, or withhold and pay, or collect and pay any tax that is due after assessment or demand for payment as provided in this title, the amount of the tax shall be a lien in favor of the Authority on all the property of that taxpayer as allowed hereunder.
(2) The lien imposed by subsection (1) of this section shall arise at the time that the assessment or demand has been made as provided in this chapter, and shall continue until the liability for payment of the amount assessed or demanded is satisfied or extinguished.
(3) As against any mortgagee, pledgee, purchaser, judgment creditor, lienor or other encumbrance for value, the lien imposed by subsection (1) of this section shall not be considered to have arisen or have any effect whatever unless notice of the lien has been filed. Against all subsequently arising interests, the lien shall have priority.
(4) The notice of lien must be filed in the Supreme Court of the State in which the property is located and a copy thereof sent by certified or registered mail to the taxpayer not less than 45 days after the assessment or demand for payment as provided in this title. The notice of lien:
(a) shall identify the taxpayer whose liability for taxes is sought to be enforced, the type or nature of the tax, the amount of the tax due on the date that the notice is filed plus any penalty or interest that may be chargeable, the date or approximate date on which the tax became due, and the date on which the assessment or demand for payment was delivered or mailed; and
(b) shall state:
(i) that the Authority claims a lien for the entire amount of tax asserted to be due, including applicable interest and penalties, and including any additional amounts that may become due after the notice is filed; and
(ii) that the lien may result in the levy and sale of the property if the amounts asserted to be due are not paid in full.
(5) Notwithstanding any other provision of this chapter, the following described property shall be exempt from the taking of liens and subsequent attachment and execution as imposed under this chapter:
(a) personal and household goods. All necessary household furniture, cooking and eating utensils, and all necessary wearing apparel, bedding, and provisions for household use sufficient for four months;
(b) necessities for trade or occupation. All tools, implements, utensils, work animals and vehicles that are not used for personal transportation, including travel from residence to place of employment and return thereto, and equipment necessary to enable the person against whom the attachment or execution is issued to carry on his usual occupation; and
(c) certain interests in land. All interests in land, exclusive of leasehold interests, except where such interests can be shown to have been acquired to avoid attachment or execution with respect to the cause of action to which the attachment or execution is ordered, or where attachment or execution against such interest in land is specifically permitted under a real property mortgage statute or real property deed of trust statute for the State in which the interest is located.
Source: PL 17-50 § 32.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 851 to 834 to allow all of the sections in this chapter to have eight hundred section numbers.
(1) If, within 30 days’ time following filing of the notice of lien pursuant to section 834 of this title, the delinquent taxpayer fails or refuses to pay all sums secured by the same, or to enter into other arrangements for the payment of the same, as provided in this title, the Authority may issue a tax warrant for the enforcement of such lien and for the collection of any tax secured by the lien. Upon issuing the tax warrant, any property of the delinquent taxpayer, except as provided in section 834(5) of this title, may be levied and converted to money in accordance with this chapter.
(2) A levy shall be executed by taking possession of the taxpayer’s property pursuant to authority contained in the tax warrant or by serving the warrant upon the taxpayer, upon any other person in possession of property of the taxpayer, or upon any person or depository, including any officer or employee of any governmental entity, subdivision or agency, who owes or who will owe money to the taxpayer, who is holding funds of the taxpayer, and ordering him to reveal the extent thereof and surrender it to the state forthwith or agree to surrender it or the proceeds therefrom in the future, but, in any case, on the terms and conditions stated in the tax warrant.
(3) The tax warrant shall be directed to and executed by the Department of Justice of the Federated States of Micronesia, or, to the extent required by State law, by the Attorney General of the State in which the property may be located. Except as provided otherwise by this title, the tax warrant shall be levied and the sale or other disposal made in the same manner and with the same effect as a levy and sale under a writ of execution.
(4) A tax warrant shall:
(a) bear on its face a statement of the authority for its issuance and service, compel compliance with its terms, and shall be attested to, under oath, by the CEO;
(b) identify the taxpayer whose liability for taxes is sought to be enforced, the amount thereof, and the date or approximate date on which the tax became due;
(c) state that the Authority claims a lien for the entire amount of tax asserted to be due, including applicable interest and penalties;
(d) order the person on whom it is served to reveal all property in his possession, custody or control that belongs to the taxpayer and the extent of his own interest therein; and to reveal the amount and kind of property of the taxpayer that, to the best of his knowledge, is in the possession, custody or control of others;
(e) order the person on whom it is served to surrender the property forthwith, but may allow him to agree, in writing, to surrender the property or the proceeds therefrom on a certain date in the future when the taxpayer’s right to it would otherwise mature; and
(f) state on its face the penalties for willful failure by any person upon whom it is served to comply with its terms.
(5) Whenever any property upon which levy has been made by virtue of a tax warrant is not sufficient to satisfy the claim for which levy is made, the CEO, thereafter, and as often as may be necessary, may proceed to levy in like manner upon any other property of the taxpayer against whom the claim exists, until the amount due from the taxpayer is fully paid.
Source: PL 17-50 § 33.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 852 to 835 to allow all of the sections in this chapter to have eight hundred section numbers.
(1) Upon receipt of a tax warrant issued pursuant to section 835 of this title, any person in possession or control of property subject to levy under a tax warrant shall immediately surrender the property or discharge the obligation to the CEO; PROVIDED, HOWEVER, that the property or part of the property, that is already the subject of a bona fide attachment, execution, levy or other similar process need not be surrendered.
(2) Any person who receives a tax warrant and wrongfully fails or refuses to comply therewith shall be liable in his own person and estate to the Authority in a sum equal to the value of the property not so surrendered or paid over, but not exceeding the amount of the taxes for the collection of which such levy has been made, together with penalties and interest on such sum from the date of such levy, plus the costs of executing the warrant.
(3) As soon as practicable after the levy, the CEO shall notify the taxpayer of the amount and kind of property seized and of the total amount demanded in payment of tax.
Source: PL 17-50 § 34.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 853 to 836 to allow all of the sections in this chapter to have eight hundred section numbers.
(1) As soon as practicable after the levy and seizure of the property pursuant to section 835 of this title, the CEO shall decide on a date, time and place for the sale of any property, excepting cash or liquid deposits, which may be immediately applied pursuant to section 839 of this title, and shall make a diligent inquiry as to the identity and whereabouts of the owner of the property and persons having an interest therein, and shall notify the owner and such persons of the time and place for the sale.
(2) Notice of the sale must be given to the delinquent taxpayer, in writing, at least thirty (30) days before the date set for the sale. Such notice shall contain a description of the property to be sold, a statement of the amount due, including interest, penalties and costs, the name of the delinquent taxpayer, and a statement that, unless the amount due plus interest, penalties and costs are paid on or before the time fixed in the notice for the sale, the property, or so much of it as is necessary, will be sold in accordance with law and the notice.
(3) No sale of imperishable property shall be held until after the expiration of thirty (30) days from the date of the levy thereon; PROVIDED, HOWEVER, that perishable property may be sold immediately after seizure without notice of the sale. The CEO shall make special efforts pursuant to rules and regulations to give notice of the sale to persons with a particular interest in special property, and, apart from the requirements stated above, shall advertise the sale in a manner appropriate to the kind of property to be sold.
(4) If any property of the taxpayer subject to levy cannot be reasonably divided so as to enable the CEO to sell a part thereof to raise the whole amount of the tax and expenses, the whole of the taxpayer’s interest in the property shall be sold.
(5) The levy and sale shall not be made, or the levy and sale shall be terminated and released if the taxpayer pays the entire amount due, furnishes security, or makes other arrangements for payment that are acceptable to the CEO as provided in this title. Upon making such payment or arrangements the CEO shall restore the property to the taxpayer, and all further proceedings in connection with the levy and sale of the property shall cease from the time of the payment or signing of an agreement with the Authority.
Source: PL 17-50 § 35.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 854 to 837 to allow all of the sections in this chapter to have eight hundred section numbers.
(1) Except as provided in subsection (4) of this section, the Authority shall sell the property, excluding cash and liquid deposits, at a public auction and in accordance with the notice of sale, and shall deliver to the purchaser a bill of sale for the property sold.
(2) Except as provided in subsection (4) of this section, payment must be in full, in cash or its equivalent, and made immediately after the acceptance of a bid for the property.
(3) The unsold portion of any property seized may be left at the place of sale at the risk and cost of the delinquent taxpayer.
(4) The foregoing notwithstanding, stocks, bonds, certificates of deposit, promissory notes or other securities which have a specific value or prevailing market price may be sold by the Authority at a private sale at a price not lower than the specific price or prevailing market price, or may otherwise be liquidated to their cash value in accordance with the regulations promulgated by the CEO. No such liquidation may occur sooner than the date scheduled for the sale as stated in the notice.
Source: PL 17-50 § 36.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 855 to 838 to allow all of the sections in this chapter to have eight hundred section numbers.
(1) Money realized by levy or sale under this title shall be first applied against the expenses of the proceedings;
(2) The amount remaining, if any, then shall be applied to the liability for the tax, interest and penalties for which the levy was pursued;
(3) Except as provided in subsection (4) of this section, the balance, if any, shall be returned to the taxpayer or the person legally entitled thereto and a receipt obtained;
(4) If, before the sale, any person having an interest in or lien upon the property files with the Authority notice of his interest or lien, the Authority shall withhold any excess, pending a determination of the rights of the respective parties to it by a court of competent jurisdiction.
Source: PL 17-50 § 37.
Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 856 to 839 to allow all of the sections in this chapter to have eight hundred section numbers.