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Tuesday, August 19, 2014

Mark Martin fesses up, but excuse on tax double-dip still raises questions

Posted By on Tue, Aug 19, 2014 at 7:16 AM

Secretary of State Mark Martin communicated yesterday with the Arkansas Democrat-Gazette (but did not respond to my FOI request for similar responses or any communications that might exist among staff members dealing with this question) about his illegal double dip of homestead property tax exemptions on homes in Benton and Washington Counties.

Martin's comments — at least those published — were a noticeable improvement from his first defensive response to Blue Hog Report's account Friday of his double dip. He has paid $2,100 to cover three years of improper credits and penalties, the maximum repayment required by law. He said he'll investigate further and pay all improper amounts he received, perhaps another $1,250 for double dips back to 2004.

That's good.

Martin did not blame his problems on political opponents Monday, at least insofar as the Bill Bowden's reporting in the D-G went. That's also an improvement over his initial combative and petulant statement about the "politics of personal destruction." The only tools of destruction here were wielded by Martin.

But he did continue to blame his problem on the mortgage application process. The article even quoted a Washington County tax official in support of Martin:

Washington County Collector David A. Ruff said notices about tax credits are sent to companies that hold the mortgage to the property, not to the owner. So the Martins may have received no receipts indicating they were getting two tax credits.

Martin, who spent much of Monday digging through boxes of records, said that appears to be the case.

"At this time, it is my belief that those notifications go directly to the mortgage company," Martin wrote Monday.

There's a problem with this alibi, readily apparent even in the D-G article. If the taxpayer got no notice, how did it happen that the Martins signed forms claiming the exemption in two counties? Furthermore tax credits are note "sent" to anyone. The property tax bill — which indeed might be part of an escrow process — is reduced by that amount.

The mortgage dates and the exemption documents also don't add up, a small but salient fact.

From Blue Hog, we know that the Martins signed a mortgage April 10, 2003 on a house in Rogers in Benton County. They had long before signed to receive a tax credit form on that house in 2001, a form that clearly states it was for their primary residence.

Then, on Aug. 25, 2003, the Martins signed a mortgage on a house in Prairie Grove, which they now consider their primary residence. It was not until Oct. 27 that Sharon Martin signed the form in Washington County qualifying for a homestead tax exemption. The document apparently did not include, as it does now, boilerplate language restating the statutory requirement that only one home be a primary residence. But it WAS a homestead tax exemption form and it was signed two months after the mortgage was signed.

Martin, as I say, won't respond to my questions. But the circumstantial evidence appears to  run counter to his alibi that the error can be put down to a process controlled by mortgage officers. Forms identifying a property tax exemption were signed by the Martin family on two occasions separate from the mortgage process. I don't know what procedures are in those counties, but in Pulaski County, when the assessor receives notices of land sales, the buyers are sent a form notifying them of the availability of the credit available for primary residences.

It may be true that no notices are sent to taxpayers each year reminding them that they are receiving a homestead credit. It might be these were honest mistakes of ignorance of the law. But if you sign a clearly identified homestead property tax exemption while owning two houses, mightn't you give some thought to your past home ownership and tax situation?

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