2013 End of Session Wrap Up: Tax and Revenue – Homestead Tax Credit Legislation

This post summarizes the status of tax and revenue bills related to the Homestead Property Tax Credit program that MACo either considered or took a position on.

Application Extension:  As introduced, HB 128/SB 158 would have extended the application deadline for the Homestead Property Tax Credit from December 31, 2012 to June 1, 2013. Extending the deadline in this manner would not provide sufficient time for the State Department of Assessments and Taxation (SDAT) to process applications and make adjustments in the tax files prior to tax bills being sent. This would have resulted in counties making mid-year adjustments, mailing reinstatement notices and possibly refunding taxes that have already been paid for thousands of homeowners. MACo supported these bills with an amendment to extend the deadline to December 30,2013 to avoid the administrative complexities associated with making changes in tax credit status mid-year. Working with SDAT, the bills sponsors and the House and Senate Committees, MACo was successful in amending both bills.

Final Status: Both bills passed the General Assembly with amendments supported by MACo. 

Eligibility for Settlor, Grantor, or Beneficiary of a Trust: As introduced, HB 965 would have expanded eligibility for the Homestead Property Tax Credit to include a settlor, grantor, or beneficiary of a trust. The bill would have also provided for an unusual six-year refund period. MACo opposed this bill as it would have substantially expanded the meaning of “homeowner” for these purposes, well beyond the sensible notion of the property owner of a principal residence, to include a wide range of trust arrangements. MACo also objected to the bill being applied retroactively to the 2007 tax year.  Working with SDAT, the bill sponsor, and the Committee, MACo was successful in amending the bill in the House to narrow its scope and remove its retroactive application.

Final Status: No action was taken on HB 965 by the Senate Budget and Taxation Committee. 

Residency Verification: SB 645 would require counties to provide electronic records related to abandoned property and residential rental licenses or permits to assist with establishing principal residency for a homestead property tax credit. MACo supported SB 645 with an amendment. Although the bill would strengthen the current process for verifying principal residency, it was concerned that not all counties have abandoned property registries and/or listings of residential rental licenses or permits, which would make it extremely difficult for all counties to comply with this legislation. MACo’s amendments would have required counties to provide this information only if  the county collects it.

Final Status: No action was taken on SB 645 by the Senate Budget and Taxation Committee.