LITTLE ROCK — Pulaski County Assessor Janet Ward said Tuesday that she’s never levied a penalty against anyone who received a homestead-property-tax credit that he didn’t legally deserve.
“The homestead credit is complicated to administer,” Ward said. “It’s complicated for taxpayers. I never had a taxpayer try to cheat us. I didn’t feel like [levying a penalty] would be the right thing to do.”
She estimated that “maybe less than 100” people have improperly received the credit in Pulaski County over the past 10 years.
One of those, Jim Keet of Little Rock, the Republican candidate for governor, last month paid the Pulaski County treasurer $1,000 to make up for credits he was improperly granted for 2006, 2007 and 2008.
He said his wife, Margaret “Doody” Keet, pays the family bills. She said she noticed they were getting a “credit,” but the bill didn’t say what it was for and she didn’t seek an explanation.
Ward has acknowledged that it was an assessor’s office mistake.
Keet’s spokesman, Richard Atkinson, said Tuesday that the penalty provided by law, which amounts to 100 percent of the credit the taxpayer wasn’t entitled to, doesn’t apply to Keet’s situation because “the statute requires a determination by the assessor that the homestead exemption was improperly claimed by the property owner. No such determination has been made.”
The law sets a penalty for wrongly “claiming” the credit. The credit was applied to Keet’s tax bill not because he filed a claim for it, but because it had been claimed by the previous owner of a house Keet bought.
The question of when a penalty should be applied and whether it is optional divides county officials.
Pulaski County Attorney Karla Burnett agreed that Keet shouldn’t have to pay a penalty because it was “our mistake” he received the credit. She said a change in county computer systems led to the credit on Keet’s house in the Chenal Valley neighborhood in west Little Rock carrying over while the Keets were living in Florida.
On the other hand, anyone who claims a credit for property that doesn’t meet homestead-tax-credit requirements should be required to pay a penalty on top of paying the credited amount back to the county, Burnett said.
Ward, president of the Arkansas Assessors Association, said she plans to poll other assessors at an association meeting in Little Rock on Thursday about how they handle the penalty.
It’s also unclear whether there’s a problem with people filing multiple claims for the homestead exemption. County officials say there is no way to know how many people are claiming credits in multiple counties because there is no central database of homestead credits.
Amendment 79 of the Arkansas Constitution, adopted by voters in 2000, allows someone to take a homestead exemption. Homesteads are defined in Arkansas law as a “principal place of residence.” That credit initially amounted to $300 toward the annual property tax bill but has since been raised by the Legislature to $350.
Arkansas Code Annotated 26-26-1119, which includes acts passed by the Legislature in 2001 and 2003, says “no property owner shall claim more than one homestead property tax credit for each year.”
Faye Tate, deputy director of the state Assessment Coordination Department, and Pulaski County officials said that means property outside Arkansas as well as within the state, although the statute neither expressly says that nor expressly rules it out.
Keet has said he was claiming a Florida homestead credit for a house in Gulf Breeze, Fla., at the same time he was benefiting from one on the house in Little Rock. He has said he moved back to Little Rock in the second half of 2008.
Further, the Arkansas law says, “If the county assessor determines that a property owner has claimed more than one homestead property tax credit in a year, in addition to repayment of the homestead property tax credit, the designated preparer of the tax books shall extend a penalty of one hundred percent of the amount of the unlawfully claimed homestead property tax credit.”
Pulaski County officials disagreed as to who is the “designated preparer of the tax books.”
Ward and Burnett said that was Ward.
But Pulaski County Treasurer Debra Buckner said it was Buckner.
They all agreed, however, that it was Ward’s responsibility to assess the penalty.
Ward describes the penalty as her “option” to levy.
“I treated [Keet] like any other taxpayer,” she said.
She said she hasn’t assessed the penalty on anybody because no taxpayer receiving more than one credit has shown a “malicious intent.” She acknowledged that the law doesn’t require that intent be demonstrated for the penalty to be assessed.
She referred questions to Burnett, the county attorney, as to whether she is handling the matter correctly.
Burnett said the penalty would have to be assessed on anybody who claimed two or more credits. She said anyone who disputes the fine could appeal to county court, which is presided over by the county judge.
As to whether Ward was wrong in not assessing the penalty on Keet, Burnett said she couldn’t make a judgment because she didn’t have the facts surrounding those credits.
Tax payments are made to Buckner’s office.
Former state Rep. Bill Stovall, D-Quitman, worked on the legislation in 2001 and 2003 that set up the penalty provision. He said legislators and county officials agreed that there needed to be a strong penalty. He said it was needed to serve as a deterrent against people claiming more than one homestead.
Stovall, now House chief of staff, said he recalled no discussion during debate on those laws about the possibility of waiving the penalty if someone just got the credit by mistake.
Keet is challenging Gov. Mike Beebe, a Democrat. Beebe has been critical of Keet’s tax problems, which have included being late on taxes and not assessing property for tax purposes.
Beebe’s campaign had no comment about whether Keet should pay a penalty.
“This is between Mr. Keet and the tax assessor,” said Beebe spokesman Anne Hughes.
Beebe, while a state senator in 1999, helped draft Amendment 79.
Ward said multiple credits are sometimes claimed by people who live in one place, such as in Pulaski County, and have a lake house in another county, such as Montgomery County.
She said “there is no way to know” about multiple credit claims unless the taxpayer “calls and tells us.”
Ward contacted Keet about the credit after someone called her office about Keet’s taxes.Keet has said he believes that person was a “private investigator” for Beebe. Beebe has acknowledged using an “opposition researcher,” but his campaign has said the person that called Ward wasn’t connected to the campaign.
Chris Villines, executive director of the Association of Arkansas Counties, previously served as Saline County collector. In that role, he said, he came across only “one or two” improper homestead claims in 10 years.
“In Saline County we required payback of the credit and the 100 percent penalty in those cases,” Villines said.
He said there have been two problems keeping counties from setting up a central database: a federal law banning the use of Social Security numbers to identify taxpayers and the lack of money to set up a system that creates some other type of taxpayer identification number.
Front Section, Pages 1 on 09/22/2010