Secretary of State Mark Martin said he wasn't aware until Friday that he may have violated state law by taking a $350-a-year homestead property tax credit on two houses at the same time.
"If we owe money, then of course we are going to pay it back," Martin said via email.
Under Arkansas Code Annotated 26-26-1119(a)(1), "No property owner shall claim more than one homestead property tax credit for each year."
On Friday, Matt Campbell, a Little Rock lawyer, reported on his blog, BlueHogReport.com, that Martin had taken the tax credits simultaneously on a house in Prairie Grove and one in Rogers for at least the past six years.
In the blog post, Campbell credited an article in the Arkansas Democrat-Gazette on Sunday for inspiring his research into Martin's homestead tax credits.
The newspaper article by Michael R. Wickline cited data-tracking companies' claim that people illegally claiming multiple homestead tax credits are costing the state millions of dollars. The companies, LexisNexis and Tax Management Associates Inc., had offered to help the state collect the improperly granted tax exemptions.
Based on the mortgages Martin and his wife, Sharon, signed when buying both houses in 2003, he claimed each house to be his primary residence for a year after the purchase, according to Blue Hog Report. Then, Martin apparently continued to take homestead tax credits on both residences, according to the blog.
"The blog post was the first I had heard of the matter, so we're still looking into it," Martin said late Friday. "Apparently, this checkoff is integrated into the mortgage loan process, and thousands of innocent Arkansan citizens are unwittingly involved. This is more proof of the complexity of the tax code and the need for it to be simplified."
Martin and his wife, Sharon, have a 2,066-square-foot house at 123 N. Pittman St. in Prairie Grove, according to the Washington County assessor's office. The one-story, frame-siding house was built in 1949. It has an estimated market value of $146,100.
Both Mark and Sharon Martin are registered to vote from the Prairie Grove address.
The couple also have a 1,620-square-foot house at 18156 Posy Mountain Drive in Rogers, according to the Benton County assessor's office. The two-story house was built in 1996. It was appraised in 2011 for $87,450.
If an assessor determines someone has taken the tax credit on more than one property, the owner can be made to repay the additional tax credit and a penalty equal to the credit, according to Arkansas Code Annotated 26-26-1119(a)(2).
The homestead tax credits were taken on both houses at least since 2008, which is as far back as online records go for the Benton County tax assessor.
Since the homestead property tax credit is $350 per year, if Martin claimed the credit on two houses from 2008 through 2013, that would amount to $2,100 in improper credits he received. If he did it back to 2003, that would amount to $3,850.
Repayment and penalties only apply to the three years after the property tax exemption was claimed, according to Arkansas Code Annotated 26-26-1119(f)(1) and (2). That means Martin could be required by law to repay $1,050, plus a penalty of $1,050.
In his email response, Martin took a crack at Campbell for what he called "gotcha politics," saying the blog post was "nothing more than the last dying gasp of a very desperate Democratic party in Arkansas."
"These so-called 'oppo' researchers are not concerned with moving Arkansas forward, but concerned with winning the soundbite for their partisan side," wrote Martin. "This type of politics of personal destruction is what is wrong with the political process today. Judge me for the performance of my office and our effective service to the people of Arkansas. I am proud of the hardworking people who work in my office."
On July 27, the Democrat-Gazette reported that Asa Hutchinson, the Republican nominee for governor, had taken tax credits on residences in both Benton and Pulaski counties in tax years 2008, 2009, 2010 and 2011. Hutchinson repaid the extra credits for the past three years shortly before he said he intended to run for governor.
Then, on July 29, Hutchinson said he'd give Pulaski County $1,750 for improperly claiming the homestead tax credits there, even though the statute of limitations has expired.
The move came hours after Democratic gubernatorial nominee Mike Ross of Little Rock and state Democratic Party Chairman Vince Insalaco of North Little Rock called on him to make the payment.
Hutchinson said he would repay $350 for the tax credit he improperly received in 2008, plus $1,400 in penalties, and wasn't bowing to Democratic pressure.
"We want to put closure to this," he said.
Hutchinson wasn't the first candidate to repay homestead tax credits that were improperly received.
In June 2010, Republican gubernatorial nominee Jim Keet of Little Rock paid the Pulaski County treasurer $1,000 to make up for three years of mistakenly receiving Arkansas homestead property tax credit while he was living in Florida.
At that time, Keet said his wife paid the household bills, and that the county tax bills for 2006, 2007 and 2008 had lower-than-appropriate totals because the county erred.
Like Hutchinson, Keet wasn't fined.
NW News on 08/16/2014