Check your Vt. property tax bill; thousands are probably inaccurate
ADDISON COUNTY — Many property tax bills already sent out by Vermont town clerks and treasurers lack information about education property tax breaks for eligible homeowners, according to state and local officials. The Vermont Department of Taxes blamed “a processing backlog” at the department for the snafu.
“It’s a mess,” said Vergennes City Clerk and Treasurer Joan Devine on Tuesday, adding that by about 2 p.m. that day alone she and Assistant Clerk/Treasurer Melissa Wright had already handled eight calls on the issue.
Devine and Middlebury Treasurer Jackie Sullivan said state tax officials are pledging to send revised information to local clerks and treasurers by Aug. 1, after which towns will mail out revised bills to affected residential property owners.
“They will be sending the town another homestead/adjustment download file on 8/1/2018,” Sullivan wrote in an email to the Independent. “Only those properties with corrections to the homestead or state tax payment will receive revised bills from the Town of Middlebury. I am recommending taxpayers who question whether their information is complete to call the Vermont Department of Taxes at 866-828-2865.”
Early this week, Sullivan said she has been reassured the problematic information will “be reviewed/processed within the next 7-10 days,” and Devine said the tax department is assuring clerks the returns in question are “under review.”
In the meantime Devine said taxpayers who usually receive breaks on school taxes should review their bills carefully.
“This one is major,” she said.
Vermont Tax Commissioner Kaj Samsom told the Independent that the department, possibly due to the new federal tax code, was late in reviewing many of the roughly 175,000 Homestead Declarations that Vermonters must file every year.
According to a post that Devine provided to the Independent from the Vermont Municipal Government Discussion Network, the Department of Taxes had yet to review 14,000 of those declarations by a July 1 deadline to provide tax information to towns.
Samsom said that total was unusually high, and acknowledged a communication failure in his department to alert towns — especially the 25 percent of communities that send out tax bills in July, including Middlebury and Vergennes as well as larger cities such as Burlington and Montpelier — that the files they were receiving on July 1 were incomplete.
“It was a miscommunication within the department about communication,” Samsom said. “That type of communication should have gone out before July 1 … So they were prepared.”
Technically Homestead Declarations are due on April 15, but late filings are allowed. Samsom said the problem lies not only with late, but also inaccurate or incomplete filings; this year about 55,000 of the 175,000 declarations required review.
Additionally, Samsom said, 70 percent of Vermonters pay the education portion of their property taxes based on their incomes and not on the assessed value of their property, and therefore towns need accurate information about prebates (adjustments to the individual tax bills based on income) as well as completed declaration reviews in order to send out accurate bills.
“Both of those are key pieces of information that towns need to incorporate into their property tax bills every year,” he said, noting that when Vermonters complete and file their homestead declarations in a timely manner, the Tax Department can — as required by law — remit that information to the towns by July 1.
But with 14,000 un-reviewed declarations and a quarter of the towns already sending out bills, including many larger communities, and 70 percent of those to taxpayers who can expect prebates, Samsom acknowledged that somewhere between 3,500 and 7,000 bills statewide are probably inaccurate.
“I would consider that a fair analysis,” Samsom said.
He said the department plans an updated release to the towns by July 27, and apologized to taxpayers and municipal workers.
“It’s the kind of things we acknowledged and apologize for. We know it’s disruptive for the July-billing towns, and also for taxpayers who might get a bit of a sticker shock when they open their tax bills,” he said.
Anyone with a question on their tax bill should contact the tax department at firstname.lastname@example.org or 802-828-2865, he said.
TOWNS DEAL WITH MESS
Town clerks and treasurers remain unhappy. One post from the discussion network forwarded by Devine noted that clerks must satisfy banks with which taxpayers escrow monthly payments, and deadlines are looming; taxpayers will overpay those payments because the issues cannot be settled in a timely manner, and those overpayments could pose a hardship for some residents; towns’ software will struggle to handle payment adjustments; and the same problem, on a smaller scale, arose a year ago and was not dealt with.
The post concluded, “Many Vermont municipalities have very limited staff so all this manual working, including all the people that come in and call us because their state adjustments are not on their tax bills, is a hardship for us.”
Secretary of State Jim Condos joined in on the discussion network with what he called “a bit of constructive comment” in response to the tax department post there.
“Your note underestimates the amount of work that the clerks would have to do to resolve this homestead declaration problem … this issue causes much more work than you can imagine,” Condos wrote. “Simply, VT’s City and Town Clerks work hard every day completing a multitude of tasks in addition to property tax bills.”
Condos further offered in response to the tax department post a possible solution to the problem of so many Homestead Declaration forms requiring department review:
“By your own numbers, over 30 percent of the forms received ‘had errors or otherwise were flagged, requiring manual intervention by a tax examiner to post correctly.’ From a management perspective, if over 30 percent of the forms are incorrect or need more review, it appears that your forms may need improvement. Perhaps (the Tax Department) should look at their forms more closely, utilizing focus groups with Clerks and homeowners to see why this is happening in such large numbers.”
Anyone with a question on their tax bill should contact the tax department at email@example.com or 802-828-2865.
Andy Kirkaldy may be reached at firstname.lastname@example.org.
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