Shoffner: Deserve tax-free state ride

Won’t keep log or pay, she says

— State Treasurer Martha Shoffner maintained Tuesday that she deserves a taxfree vehicle provided by the state and doubts that the Internal Revenue Service would bother auditing her.

Another constitutional officer, Auditor Jim Wood, said he would start paying taxes for personal use of his state vehicle and will pay them as far back as his accountant advises.

Wood said from now on, he’ll keep track of all personal miles that he drives in his state-issued vehicle, a 2007 Lincoln Town Car.

Shoffner, who drives a state-issued 2009 Chevrolet Tahoe, said she won’t do that.

“If I’m going to keep a log, I’ll drive an 18-wheeler,” she said. “I want to stand my ground.”

Shoffner said she has been bothered that fellow state constitutional officers in recent days have either said they will pay income taxes for personal use of state vehicles or give up the vehicles.

“It’s political posturing,” Shoffner said. A state vehicle “is intended for our own use and our own [state] business. It’s a convenience to me. It’s not income.”

She said she takes issue with Gov. Mike Beebe maintaining that he doesn’t have to pay income taxes on rides he receives from his state police security detail.

“The governor has a manservant driving him around,” Shoffner said. “If the governor is going to say he’s exempt, why wouldn’t we be exempt? We’re all constitutional officers.”

The status regarding the other elected officials with state vehicles is:

Lt. Gov. Bill Halter was the only one in a July 4 Arkansas Democrat-Gazette article who said he pays income taxes for the personal use of his state-provided 2007 Ford Explorer.

The article cited IRS and state Department of Finance and Administration regulations requiring that income taxes be paid on personal use of state vehicles. Those rules make no exemptions for elected officials.

Attorney General Dustin McDaniel on Monday said he has turned in the keys to his state 2009 Chevrolet Ta-hoe. He said he wouldn’t pay back-taxes but would pay the state $2,903 for past personal use since taking office in 2007. McDaniel wrote the check to “office of attorney general” and turned it in Tuesday, a spokesman said.

Secretary of State Charlie Daniels said Monday that he’ll keep his state 2008 Chevrolet Suburban but will start paying income taxes on it and backtaxes based on personal use as far as back as his accountant tells him.

House Speaker Robbie Wills of Conway is exempt from paying income taxes on his state 2008 Chevrolet Tahoe because he’s speaker “24-7,” House Chief of Staff Buddy Johnson has said. Wills hasn’t returned messages seeking comment.

Land Commissioner Mark Wilcox has used a state 2008 Toyota Sequoia to commute from his home in Wooster and a state 2006 Chevrolet Silverado at his farm at Greenbrier. Wilcox didn’t return a message Tuesday. He previously has said he doesn’t pay income taxes for the personal use of the vehicles.

An office spokesman, Mary Sue Whitelaw, said Friday that Wilcox “will comply with the IRS rules and regulations,” but she wouldn’t say whether he would change his practices regarding state vehicles.

Beebe has said he paid income taxes on the personal use of his state vehicle when he was attorney general.

Regarding whether a governor must pay taxes on being driven around by a state police officer, an IRS spokesman has cited a regulation that says personal use of “unmarked law enforcement vehicles” isn’t considered taxable as long as other criteria are met.

Those include the government employer authorizing the personal use and the personal use having some connection to “law-enforcement purposes.” State law requires state police to protect the governor.

On Tuesday, Wood’s office sent notices, with the IRS regulations on paying taxes for fringe benefits, to other constitutional officers and to the House speaker.

“Information regarding any income other than ... cash wages should be reported to this office to allow proper reporting,” wrote Larry Crane, chief deputy in the auditor’s office.

Wood, in office since 2003, said Tuesday that he didn’t previously pay the taxes because “I wasn’t aware I was supposed to before.”

His office issues paychecks to elected officials and previously hasn’t withheld income taxes for their personal use of state vehicles.

Shoffner took issue with the notice. She said that before the elected officials pay taxes “some authority” should provide a definitive statement saying they must pay taxes. She said she doubted that Wood’s office had that authority.

“I’ve been in this office 3 1 /2 years, and I’ve never received anything from them pertaining to taxes,” she said. “Is this political?”

Wood said he had no comment about Shoffner’s complaint.

Shoffner said she was skeptical that the IRS would even bother trying to audit elected officials for personal use of state vehicles.

“How would they?” she asked. “We’re driving around the state for all functions and duties. Is 10 miles personal? 20? Why would the IRS be interested?”

State Revenue Commissioner Tim Leathers said the state generally will go back three years in collecting delinquent taxes. He declined to comment on whether the state would consider auditing constitutional officers, citing taxpayer confidentiality rules.

IRS regulations generally refer to a three-year period for taxes to be assessed after they would have been due.

Shoffner has an apartment in Little Rock and a residence in Newport. She said her state vehicle is her only vehicle.

She said she resented that the actions of one elected official has led to her being asked about her taxes.

After a May 30 article about Wilcox’s use of a state vehicle on his farm, the Democrat-Gazette asked all the constitutional officers about their state vehicle use and whether they paid income taxes on that use.

“Obviously it’s a misuse of state property for personal business,” Shoffner said. “I see that as a problem, but what does that have to do with taxes?”

All of the elected officials using state vehicles are Democrats.

On Tuesday, state Republican Party Chairman Doyle Webb and GOP gubernatorial candidate Jim Keet held a news conference.

“The people of Arkansas ... will not tolerate political leaders who are unwilling to shake up the old-boy network,” Webb said.

Keet has called for no personal use of state vehicles.

But, he said, he agrees with Beebe that there should be an exception with the governor’s security detail.

Webb is a former state senator and was chief of staff for the late Lt. Gov. Win Rockefeller. He said Rockefeller didn’t have a state car. He said he has always assumed that other elected officials with state cars didn’t use them for personal business. He said that’s why he didn’t complain about state vehicle use by elected officials previously.

Webb and Keet said they believe that personal use of state vehicles violates Amendment 70 to the state constitution, which bans certain state elected officials from getting income beyond their salaries.

McDaniel has taken that same position. Beebe has said he’s not sure and never considered the constitutional issue as attorney general when he drove a state vehicle.

“If the governor hasn’t done anything to address these issues, it shows that either he’s not concerned by them, as I am, or he ... doesn’t want to ruffle feathers,” Keet said.

Webb said the party is considering filing an illegal exaction lawsuit to require elected officials to pay the state for personal use of state vehicles. Whether the party files one will depend on what elected officials do to make amends, he said.

Beebe has said if state vehicle use is considered to be a violation of Amendment 70 then retirement contributions and health insurance could be viewed that way as well.

Keet said that’s a “great question,” but he considers a vehicle a “perk” that violates the amendment.

Beebe campaign spokesman Anne Hughes said, “We welcome any insight Mr. Keet might have” about complying with tax codes.

Front Section, Pages 1 on 07/14/2010

Upcoming Events