Brattleboro repeals tax penalty
BRATTLEBORO -- Property owners who make a mistake on their tax bill homestead declaration will no longer have to pay a penalty after the Selectboard repealed a 2011 town-issued penalty.
At the board's Dec. 17 meeting, Interim Town Manager Patrick Moreland said the penalty was unfair because it did not give property owners an avenue to appeal the penalty. Moreland also said current changes in state statute could make it even harder for unaware taxpayers to do the right thing when filing.
"The town itself is not experiencing harm and the level of penalty seems unbalanced weighed against the scales of justice," Moreland said. "The policy as it is presently adopts does not provide for an appeal mechanism for the taxpayer, which is provided for in statute."
The board agreed to appeal the penalty and the board also agreed to refund all of the penalties that were collected.
Under the Vermont State Property Tax program property owners file either as a homestead owner, which means they live in the home year round, or as nonresidential owner, which applies to businesses or to second homes.
Town Assessor Russell Rice said the town adopted the penalty in 2011 to respond to changes at the state level that allowed municipalities to collect a penalty if the taxes are filed improperly.
But then in 2013 the state changed the rules again, requiring property owners to file their homestead declaration every year and in the current year many property owners did not realize that they needed to file; about $48,000 in penalties were issued.
"The statute provides for penalties that are severe, but the policy does not provide for an appeal," Rice said.
Rice also said there are state officials who oversee the tax filings and he said it was likely that the tax department would uncover false or mistaken declarations.
Moreland said the penalties were not fair.
"There is a common theme that folks are being penalized when it seems like a great many of them were honest mistakes," Moreland said. "The severity of the penalty is significant."
He said the changes in state stature have made it confusing for tax payers, and he said it appears as though most of the failures to properly declare the homestead status were honest mistakes.
"There is a considerable variation between what the present state statute requires of us and the policy that we have in place," Moreland said. "It has been somewhat confusing for taxpayers and we have issued a surpassingly large amount of fines."
The Selectboard agreed with Moreland and Rice.
"I do not see why we need to increase the town's coffers with a penalty when we're collecting taxes properly at the state level," board Chairman David Gartenstein said.
"Maybe everyone did it as a mistake," board member Donna Macomber said. "This does not seem like a way to solve our budget problem."
Howard Weiss-Tisman can be reached at firstname.lastname@example.org; or 802-254-2311, ext. 279. You can follow Howard on Twitter @HowardReformer.
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