If a town's delinquency exceeds what percentage of the total tax levy, the state must purchase?

• A. 10%
• B. 15%
• C. 20%
• D. 25%

Answer: (B)

Delinquency thresholds show when the state steps in to buy unpaid taxes from a town. If the amount of unpaid taxes becomes a significant share of what the town bills in a year, the state must purchase them to protect revenue flow and keep local government functioning smoothly.

In this rule, the trigger is fifteen percent of the total tax levy. That means once the delinquent amount reaches that level, the state is obligated to purchase the unpaid taxes. This specific threshold strikes a balance: it avoids constant state intervention for small backlogs, while ensuring towns don’t fall into a large, unmanageable gap in revenue.

If the threshold were set lower, the state would have to intervene too frequently for relatively minor delinquencies. If it were higher, sizable delinquencies could linger, risking cash flow problems for the town and undermining financial stability.