“Some will see hikes in property-tax bills” plus 2 more |
- Some will see hikes in property-tax bills
- Property taxes on some Alabama vehicles rise
- Sales tax talk packs house
| Some will see hikes in property-tax bills Posted: 14 Mar 2011 10:27 AM PDT by Mary Jo Pitzl - Mar. 14, 2011 12:00 AM Deep in law that hands out tax breaks to businesses is a potential tax increase for many Arizona homeowners. Beginning next year, owners who live in their homes must sign an affidavit affirming as much to retain a state subsidy that cuts their property-tax bill by up to $600 a year. If they rent out their house or fail to return the affidavit, they will lose the subsidy and face a higher bill. The idea is that, by weeding out people who wrongly get the subsidy, the savings will be used to offset a property-tax break for businesses. No one knows how many homeowners this will affect, though legislative analysts estimated that 25 percent of the rental homes in the state are misclassified and 6.5 percent of homes are second homes. Officials involved in Arizona's real-estate community fear the new requirement could trigger undeserved property-tax hikes. Tom Farley, CEO of the Arizona Association of Realtors, as well as the county assessors who will have to enforce the new procedure, suspect many property owners will ignore or overlook the requirement to sign the affidavit, which will be attached to the notice of valuation mailed to all property owners each year. "We think innocent people are going to get hit," Farley said. That, they say, could result in angry taxpayers and add more costs for local governments to correct the problem. Shifting burdenThe requirement to declare that a property is owner-occupied, as opposed to a rental, is part of the tax-cut and jobs bill Gov. Jan Brewer signed into law last month. One section of the legislation reduces the rate at which business and agricultural properties are assessed for taxation. Because of the way Arizona's property taxes work, a cut in one category forces an increase in another - in this case, residential properties - so that there is no net loss in tax dollars collected. But lawmakers, not wanting to see residential taxes rise, increased the amount of the state subsidy, which has been 40 percent of the property-tax bill. To cover the cost of the business-tax breaks and the increased rebate, lawmakers had to find money to fill the gap. The solution: Crack down on property owners who wrongly claim the rebate. To do that, the legislation puts the burden on owners to attest that they actually live in the house they own. If they don't, the county will reclassify it as a rental, and the homeowner rebate will no longer be used to reduce the property-tax bill. Currently, property owners indicate if a home is their residence when they buy a home, and they continue to receive the tax break indefinitely. The new legislation will require them to affirm that every other year, beginning in 2012. Lawmakers figure they can save $39 million a year by withholding the rebate from people who rent out their properties. Unintended tax hikesReal-estate agents and others fear unintended consequences. Farley told lawmakers people give scant attention to the property-valuation notices the county mails each year. This year's batch went out in late February. "It's a small little notice," he said of the current form, which is the size of a post card. When it is mailed out next year, with an affidavit form included, Farley worries it will still be overlooked. "We think most people will do what we've been conditioned to do, which is put it in our income-tax file or throw it away," he said. Others agree. "I'm sure there will be a lot of non-compliance because people don't pay attention," said Paul Petersen, information officer for the Maricopa County Assessor's Office. Once the program begins, people will have 60 days to return the affidavit or the assessor will classify the property as a rental. And that, said Cochise County Assessor Philip Leiendecker, is when the "mushroom cloud" will hit. Although affidavits may not get noticed, higher taxes will, he predicted. It's unclear if the new policy will affect property taxes due in fall 2012 or if there will be a delay until 2013. Counties are waiting for guidance from the state Department of Revenue, which must create the affidavit and related instructions. Lawmakers, such as Rep. Debbie Lesko, R-Glendale, said there will be a remedy. People have up to three years after getting a tax bill to provide the proper documentation to restore the homeowner rebate. Doubtful outcomeCounty assessors say that they're bracing for higher costs and bigger headaches when the affidavit requirement takes effect. The new legislation assumes county governments will front the costs of creating, mailing and processing the forms. After that, the legislation states that counties will be reimbursed from the higher tax collections from rental properties. But many assessors question whether the policy will yield the $39 million that budget analysts predict. "The results on the financial end won't be worth it," said Ron Gibbs, chief deputy assessor in Yavapai County. First, some rentals are eligible for the homeowner rebate. If a house is rented to a direct relative of the owner, it qualifies. Second homes, or vacation homes, also qualify as long as they are not used for more than three months. Second, assessors say they've already weeded out many properties that shouldn't be getting the state subsidy. In Cochise County, Leiendecker estimates 85 to 90 percent of the residential properties are properly classified as owner-occupied. In Maricopa County, the Assessor's Office last year removed 4,700 rental properties from the rebate list. Still, no one has a good handle on how many homeowners are wrongfully benefiting from the long-standing state rebate. That's all the more reason to use the affidavit, said Kevin McCarthy, executive director of the Arizona Tax Research Association, a business-supported advocacy group. He also said the process, although almost guaranteed to cause unwarranted angst with some taxpayers, should provide a clearer view of how taxes work. "I think it would be healthy for people to understand this system is in place and their taxes are being subsidized by the state of Arizona," McCarthy said. Possible fixAssessors as well as real-estate agents say they're talking with the Governor's Office about changes that could avert some of the headaches they foresee. But to avoid problems, they would need legislation this year. Leiendecker said it would be simpler to have homeowners pay the full tax and then apply the rebate to their income taxes. That would provide a consistent statewide standard and avoid the risk of, say, winter visitors - who don't qualify - benefiting from the homeowner rebate. "The snowbirds are not filing income tax in Arizona," he said. There's no sign of a follow-up bill, as lawmakers are bearing down on the state budget and aiming for an April adjournment. Rep. Steve Farley, D-Tucson (no relation to Tom Farley), said the new law wrongly puts the burden on the property owner to prove he or she merits the homeowner rebate. "This has the potential for massive unintended consequences," he said. If people claim a benefit to which they're not entitled, he said, they "put the burden back on the government to investigate." This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php | |
| Property taxes on some Alabama vehicles rise Posted: 14 Mar 2011 12:06 PM PDT On Monday March 14, 2011, 3:06 pm EDT MOBILE, Ala. (AP) -- Some Alabama motorists renewing their license plates are finding they are paying more property tax than a year ago because some models are appreciating in value rather than depreciating. Bill Bass, director of the state Revenue Department's Property Tax Division, said car valuations have declined each year historically, but the demand for some types of used vehicles has caused their prices to rise. He said it's mostly bigger vehicles, including pickups and SUVs. "It's not a tremendous increase, but it's enough (that) people will notice," he said Monday. Keith and Sheelah Collins of Mobile noticed it when they went to renew the tag for their 2004 Honda Odyssey van. He said it went from $140 last year to $160 this year. Mobile County License Commissioner Kim Hastie said she had never heard of cars appreciating in value. "When you drive it off the lot you're not going to sell your car for what you paid it, so how can your tag go up every year?" she told the Press-Register. Cathy Jackson, office manager for the Houston County Tag Department, said she has been getting questions about increases, and she is not alone. "It's happening all over the state," she told the Dothan Eagle. Bass told The Associated Press that the federal government's Cash for Clunkers program reduced the inventory of used vehicles because the vehicles that were traded in had to be destroyed. That caused the selection of used vehicles to be less, which caused prices of some models to rise. Also, he said lower gas prices in 2010 increased the demand for bigger used vehicles, including pickups, sports utility vehicles and vans, and that pushed up prices. The Revenue Department uses the valuation of vehicles from Penton, which publishes the Automobile Red Book. The state agency has been using the company for more than a decade, he said. Bass said the average property tax rate statewide is 42 mills, and the state's assessment rate is 15 percent. For each $1,000 increase in value, that would add $6.30 to the cost of renewing a tag, he said. That amount will vary from county to county because some are below the average and some are higher. Follow Yahoo! Finance on ; become a fan on Facebook. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php | |
| Posted: 14 Mar 2011 11:30 AM PDT By Jacqueline Hough Kim Simpson, owner of Timeless Tea and city property owner, said no one wanted any kind of tax increase in Roanoke Rapids. Simpson was one of nine people who addressed council members Tuesday evening during a public hearing on the proposed tax. She pointed out 40 percent of Roanoke Rapids residents own their homes while 60 percent rent. "I don't think the 40 percent should be penalized for being property owners," she said. Jack Moore said he was speaking wholeheartedly for the possible one cent tax by the Roanoke Rapids City Council. "I think it is the most fair tax," he said "Some of the businessmen are against it. This tax is fair." Many who spoke at the public hearing were not fond of any kind of tax but felt it would be better than putting the burden of The Roanoke Rapids Theatre on property tax owners. Before the public hearing, Mayor Emery Doughtie explained the situation to those present. "We, as a council, are faced with difficult decisions," he said. "There is no need to look back over our shoulders." Doughtie presented three options — cutting back on services offered by the city, increasing property taxes or a possible up to one-cent sales tax increase to go toward the theater debt. The sales tax increase could generate between to $1.7 to $2 million annually. He also said a one-cent increase on property taxes would be a little more than $100,000. For a property tax increase to be effective and help with the debt, it would have to be raised 15 to 18 cents, Doughtie said. "We are going to have to look at increasing revenue," he said. "I go on the record saying I support (the sales tax increase). One female speaker felt if the sales tax increase was passed in the future that it needed to say in plain English that it goes away with the retirement of the debt. She stressed there was not a lot of trust in the city council from residents. "You have got to get serious," she said. She wanted to know if it was necessary to pay $25,000 to a grant writer or give a discount to the school system to use the pool. She also asked if a rule could be in place so the city council would never put residents in debt without a vote. "Let's get serious and get rational," she said. "Let's get real about solving the problem." Phil Hux, owner of First Carolina Agency, said he was with some of the council members when they met with area legislators about a possible sales-tax increase. He pointed out at that time, they had discussed a 1/2 cent increase. "Now it is at one cent," he said. "What made it go up?" Doughtie answered and said they were asking for up to one cent. "The quicker we can pay off the debt, then the quicker the debt is off of us," Doughtie said. Hux also asked if the city felt confident it would pass if there was a referendum brought to voters. Doughtie said some action needed to be taken by the city. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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