Stung by public backlash, a growing number of lawmakers are considering the repeal of a new law requiring that all Maryland homeowners apply for a tax credit they previously had received automatically.
A bill heard yesterday by the Senate Budget and Taxation Committee would restore the automatic protection homeowners have had from being taxed for the full value of their homes when property assessments rise rapidly.
Last year, the General Assembly unanimously approved the new law, which requires that all homeowners apply for the Homestead Tax Credit. They did so after state and local officials warned that owners of multiple properties or vacation homes might be cheating the government out of millions of dollars in revenue by improperly claiming the credits, which are reserved for principal residences only.
Sen. Edward J. Kasemeyer, sponsor of the repeal bill, said the public is confused and angry about the application requirement, which was included in the annual property assessment notices mailed in December to more than 700,000 property owners.
"All this is doing is adding an extra level of anxiety to the average Joe," said Kasemeyer, a Howard County Democrat and the Senate majority leader.
Testifying yesterday before the Budget and Taxation Committee, Kasemeyer said that the effort to weed out tax cheats was well-intentioned. But doing it now is "bad timing," he said, given the many Marylanders' struggle to cope with rising costs of various types and homeowners' complaints about the applications .
Nineteen of the Senate's 47 members signed on to the repeal bill when it was submitted, and Kasemeyer told the committee yesterday that the measure had picked up three more co-sponsors. As emergency legislation that would take effect immediately, it needs a three-fifths supermajority to pass.
About 42 percent of the homeowners to whom assessment notices were maiiled at the end of last year have filed applications for the homestead tax credit, said C. John Sullivan Jr., director of the state Department of Assessments and Taxation.
Electronic filing
Of more than 200,000 homeowners who have filed for the tax credits, about 50,000 have done so electronically, with the rest submitting paper applications, Sullivan said.
He said his department is handling a huge amount of paperwork and that many property owners have questions. A toll-free number set up to field the questions has logged more than 22,000 calls, he said.
