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GOP nominee got 2 home tax credits

Hutchinson repays 3 years’ worth by Michael R. Wickline | July 27, 2014 at 5:29 a.m.

Republican gubernatorial nominee Asa Hutchinson took a homestead property tax credit that he wasn't entitled to in Pulaski County, repaying some of the money shortly before he said he intended to run for governor.

Hutchinson improperly claimed the $350-a-year homestead property tax credit for homes in both Benton County and Pulaski County in tax years 2008, 2009, 2010 and 2011, said Joe D. Thompson, chief assessment administrator for the Pulaski County assessor's office.

State law allows people to receive the credit only on one home.

Hutchinson repaid the tax credit for three of the years and offered to repay the credit for tax year 2008, but state law only allows for repayments under a three-year statute of limitations, said Thompson.

Arkansas Code Annotated 26-26-1119 says that the appropriate county official "shall extend a penalty of one hundred percent of the amount of the unlawfully claimed homestead property tax credit."

The state Assessment Coordination Department's website says the county assessor "must" apply the penalties to the taxpayer who claims a homestead credit on a second parcel of real property.

But Thompson, who works for Pulaski County Assessor Janet Ward, a Democrat, said he chose not to levy the $1,050 fine on Hutchinson.

In interviews, Hutchinson acknowledged that he was aware in 2007 that he couldn't claim the tax credit on both homes simultaneously.

He initially said Friday that he "never claimed" a homestead credit in Pulaski County, and "it was assigned to me," without his knowledge.

However, the assessor's office has a homestead credit application, dated March 2, 2007, and signed by Hutchinson.

After he was faxed a copy of the application by the Arkansas Democrat-Gazette, Hutchinson said it appears that the property record is correct and that he's surprised that he had filled it out.

He provided a copy of his letter dated June 30, 2007, to Bob Adkins, chief executive officer of American Abstract & Title of Little Rock, whose office handled the closing on Hutchinson's condominium in Pulaski County. He said the letter illustrates that he didn't intend to claim the homestead tax credit in Pulaski County. In it, he wrote that "we cannot claim that for 2006 since we did not live at that location and we had a principal residence elsewhere."

Hutchinson had a homestead credit on a home in Bella Vista from 2006-10 and a homestead credit on a home in Rogers since then, according to a Benton County assessor's office official. That home is now assessed at $470,100.

His condominium in west Little Rock is valued at $147,700, according to the Pulaski County assessor's office.

Hutchinson isn'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 pays the household bills, and the county tax bills for 2006, 2007 and 2008 had lower-than-appropriate totals because the county erred.

Ward acknowledged that it was her office's mistake. Like Hutchinson, Keet wasn't fined.

Thompson said he didn't levy a penalty against Hutchinson because he didn't think Hutchinson intentionally claimed homestead property tax credits in both Benton and Pulaski counties.

"That could have easily been an oversight," Thompson said. "You can easily have a house, buy another house, apply over there and not tell us that you bought the other house. While that is not what the law says, we have not enforced that penalty on anybody ever in that situation, so I don't feel like it is right to enforce it on him."

Thompson said he levies the fine only if he believes the property owner intentionally took two homestead credits.

Hutchinson said he discovered in 2012 that he was getting the homestead property tax credit in Pulaski County. "[I] discovered it myself," he said. He wasn't exactly sure how he discovered it, saying that he could have learned about it when he refinanced the purchase of the Pulaski County condominium and when he paid the taxes on it. The condominium was purchased through a mortgage company, and the taxes had been paid through the mortgage company, he said.

"I immediately went down and made the correction," he said. He paid $1,050 to Pulaski County on Oct. 11, 2012, according to records in the Pulaski County treasurer's office.

Hutchinson, who lost to Democrat Mike Beebe in the 2006 governor's race, announced on Jan. 4, 2013, that he "fully intends" to run for the governor. He is a former 3rd District congressman, former Federal Homeland Security undersecretary, and former director of the Drug Enforcement Administration.

Amendment 79 of the Arkansas Constitution, adopted by voters in 2000, allows a homeowner to take a homestead credit. 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.

Through his spokesman Brad Howard, Democratic gubernatorial nominee Mike Ross of Little Rock declined to comment late Friday afternoon about Hutchinson's homestead credits. Ross hasn't ever owned more than one home at a time in Arkansas and didn't take a homeowner's credit for previously owning an apartment in Washington, D.C., Howard said.

In response to a public records request, Nevada County Assessor Pam Box said Ross sold his Prescott home in September 2012 for which he received a homestead credit. Ross purchased his west Little Rock home on Sept. 7, 2012, for which he receives a tax credit, and the home is now appraised at $761,700, according records in the Pulaski County assessor's office.

Libertarian nominee Frank Gilbert of Tull and Green Party nominee Joshua Drake said they each own one home for which they each receive a homestead credit.

Tull's home is valued at $178,950, according to the Grant County assessor's office. A value of Drake's home was not available Friday night through Garland County's website.

Thompson, the assessment administrator, said his office found roughly 500 improper homestead property tax credits in Pulaski County last year, including some erroneously given to taxpayers who had never requested them. He said he doesn't expect it to exceed 100 this year because the accuracy of the office's records about these tax credits has dramatically improved since 2010.

Many people don't necessarily know when they are claiming two homestead credits because they won't see the property tax bills with mortgages on two homes, he said.

State House candidate Jack Ladyman, a Jonesboro Republican who is running against Jonesboro Democrat Ron Carroll in the Nov. 4 general election, is among the latest batch of people with homes in Pulaski County who've improperly claimed property tax credits, Thompson said.

Ladyman improperly claimed homestead property tax credits in both Pulaski County and Washington County for three years and in both Pulaski County and Craighead County for three tax years, Thompson said. He said Ladyman has been asked to pay reimbursement of $1,050 for three of those years, plus pay a $1,050 penalty.

"It is a mistake, and I want to fix it," Ladyman said Friday. "I owe it, and I'll pay it."

A section on 07/27/2014

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