Republican gubernatorial nominee Asa Hutchinson said Tuesday night that he'll give Pulaski County $1,750 for improperly claiming 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.
The former 3rd District congressman said he wants to pay $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 of Rogers had simultaneously claimed the tax credit in both Pulaski and Benton counties for tax years 2008-11.
Arkansas limits homeowners to one homestead tax credit per year. Under state law, people claiming two homestead tax credits must return the money and pay a fine equal to the amount of the credit unlawfully claimed. But state law bars penalties from being imposed on unlawfully claimed credit after the expiration of three years from the date the credit was claimed.
Hutchinson told the Pulaski County assessor's office nearly two years ago that he'd improperly claimed two homestead tax credits and offered to repay the $1,400, according to Joe D. Thompson, chief assessment administrator.
But Thompson said he told Hutchinson the county could accept only $1,050 because the statute of limitations had expired on the improper 2008 tax credit.
Arkansas Code Annotated 26-26-1119 also says the county "shall extend a penalty of one hundred percent of the amount of the unlawfully claimed homestead property tax credit."
But Thompson said he didn't penalize Hutchinson in 2012 because he didn't believe Hutchinson had intentionally broken the law.
This week, after the Arkansas Democrat-Gazette wrote about the improper tax credits, Thompson said he had erred and should have levied a $1,050 penalty against Hutchinson in 2012. But Thompson told the paper the mistake couldn't be fixed because the statute of limitations had expired on all of Hutchinson's improper tax credits.
After reading Thompson's comments, Hutchinson said Tuesday that he decided to repay the 2008 tax credit and to donate an additional $1,400 -- the equivalent of $350 per year in penalties.
Hutchinson said he's "going the extra mile" to make sure there aren't any lingering questions about how much he should have paid back to Pulaski County for the tax credits and penalty.
"I tried to do the right thing in 2012 and I am trying to do the same thing [Tuesday]," Hutchinson said in an interview with the Democrat-Gazette.
Hutchinson said he tried to pay the $1,750 check to Pulaski County on Tuesday, but county officials have to check with the comptroller on how to accept his $1,750 check and "hopefully they will take it as a donation to the county."
Hutchinson said in a letter dated Tuesday to the Pulaski County Tax Collections Division that on the basis of "media reports, it seems that there is an issue as to whether the penalty should have been assessed.
"Since this was my error I wanted to pay the county for 2008 and to pay any amount that could have been assessed as a penalty," he wrote.
Hutchinson said in his letter that he discovered in October 2012 that he had received a homestead credit for which he was not entitled. "It was definitely a mistake and an error on my part," he wrote, adding he reported the error to the Pulaski County assessor's office on Oct. 11, 2012, and was told he should pay $1,500 for tax years 2009, 2010 and 2011 and "this was paid."
Hutchinson initially said Friday that he "never claimed" the credit in Pulaski County. After being faxed a copy of a Pulaski County homestead credit application dated March 2, 2007, and signed by him, he said he was surprised to learn that he applied for the credit.
Ross spokesman Brad Howard said Tuesday that Hutchinson "owes it to every law-abiding and hard working Arkansan to play by the same set of rules as everyone else.
"He illegally applied for and received two homestead tax credits, only paid back some of them weeks before announcing for governor, and didn't pay any of the required penalties. His fraudulent actions took place soon after moving to Arkansas from the Washington area, where he was a highly paid lobbyist and registered Virginia voter. Maybe that's how lobbyists do things in Washington, DC, but we expect more integrity from someone running for governor of our state," Howard said in a written statement.
"Mike Ross believes candidates for elective office who are asking for the public's trust should be held to a higher standard," Howard said. Ross is a former 4th District congressman.
Insalaco, the Democratic Party chairman, had also been sharply critical. "Congressman Hutchinson cheated on his taxes when he wrongfully took a homestead tax credit on both of his homes," he said in a news release issued Tuesday.
"Congressman Hutchinson doesn't deserve special treatment, and as a candidate for Governor of Arkansas, he should be held to the highest ethical standards," Insalaco said. Thompson has said that the Pulaski County assessor's office treated Hutchinson like it does other property owners and had only penalized a handful of property owners for improperly claimed tax credits over the past several years.
Hutchinson said Insalaco and Ross' statements "crossed every line of fairness" and had no impact "other than they made my blood boil a little bit."
Along with Green Party candidate Joshua Drake of Hot Springs and Libertarian candidate Frank Gilbert of Tull, Hutchinson and Ross are jousting to succeed term-limited Democratic Gov. Mike Beebe in the Nov. 4 general election.
A section on 07/30/2014