Lobbyists for the state's real estate agents endorsed the repeal, arguing that the application process is confusing and that it might prevent some homeowners who are legitimately entitled to the tax credit from getting it.
"If even one of these people has trouble applying for the credit, and lose it, it's a tragedy," said Mark Feinroth, lobbyist for the Maryland Association of Realtors.
Failure to get the tax credit could be costly, as it can shave hundreds or, in some cases, thousands of dollars off of a homeowner's annual tax bill.
10 percent cap
The state homestead credit law puts a 10 percent cap on the amount of a home's increased value that can be taxed each year. The law allows localities to set even lower ceilings, and many have.
People who have bought a home this year have 180 days to apply for the credit. Current homeowners have until the end of 2012 to apply for the credit. But only those who received assessment notices in December have been advised to apply, and only those homeowners have been given access codes to do so online.
The online process was confusing, Feinroth said, pointing out that the letter he got with his reassessment notice said he had until April 1 to file electronically. State officials said that deadline was set to avoid overloading the computer system they are using to process the applications, but it doesn't prevent homeowners from submitting a paper application later.
State officials said they have no idea how many of the 1.4 million property owners receiving homestead tax credits are claiming them improperly. If even 2 percent of the credits are wrongly claimed, that costs the state $10 million a year in taxes, they said.
Sullivan, the chief of state assessments and taxation, warned lawmakers that eliminating the application would substantially reduce the state's ability to weed out property owners getting the homestead tax credit on multiple properties or vacation homes.
Opposing repeal
Representatives of county governments also opposed the repeal, arguing that those who are wrongly claiming tax credits are forcing everyone else to pay more in taxes. They urged the legislature to give the department a chance to upgrade its public information on the credit or amend the law somehow.
Kasemeyer said the state probably could have done a better job of informing the public about the application requirement.
"I think it's a good idea," Kasemeyer said of the tax-credit screening, "but not the right time."
He said he didn't mind the application requirement but that "right now, I'd like to get rid of it."
tim.wheeler@baltsun.com
