Tax Credit

Nearly 27,000 city properties in March were in danger of going to tax sale, but ultimately about 10,600 had liens included in the auction Monday. Investors bought 6,545 of the lien certificates , which raised $20 million for the city, according to the Finance Department. It's not unusual for property owners to pay up in April, just before the annual spring tax sale. But one of the narrowest misses this year was a case in which the homeowner paid last month -- after she learned that the state had retroactively reduced a tax credit on her property -- and the city lost the check.

Nearly 27,000 city properties in March were in danger of going to tax sale, but ultimately about 10,600 had liens included in the auction Monday. Investors bought 6,545 of the lien certificates , which raised $20 million for the city, according to the Finance Department. It's not unusual for property owners to pay up in April, just before the annual spring tax sale. But one of the narrowest misses this year was a case in which the homeowner paid last month -- after she learned that the state had retroactively reduced a tax credit on her property -- and the city lost the check.

State health officials and advocates joined CareFirst BlueCross BlueShield Tuesday in unveiling a more than $150,000 campaign to spread the word about tax credits available to small businesses under federal health care reform. Small businesses with 25 or fewer employees and average wages of less than $50,000 are eligible for a credit of up to 35 percent of their health insurance costs. The businesses must also pay 50 percent of employee premiums to be eligible. Lt. Gov. Anthony Brown, other state officials and members of Maryland Health Care for All!

It's been about a year and a half since former first daughter Jenna Bush Hager and her husband, Henry, reportedly left their South Baltimore rowhouse for new digs in Manhattan. But Henry Hager still owns the Baltimore place — and the couple still enjoys a property tax break that's supposed to be available only to owner-occupants. The Hagers' tax credit this year is small: a $296.40 discount on a tax bill approaching $9,000. Still, why would they get any break as absentee owners?

After reading a number of recent articles and letters regarding the solar energy property tax credit, I thought it would be helpful to provide a historical perspective. The current credit of 50 percent of the cost of a qualified system, up to a maximum of $5,000, was enacted by the County Council in 2006. The positive impact on the solar-energy industry was immediate. Solar installations in the county skyrocketed by more than 500 percent the following year, new companies sprang up in and around the county, and hundreds of new jobs were created.

Last week while reporting on the latest tax credit mess , we learned about an obscure 1999 Baltimore law that appeared to have potentially big consequences. It seemed to bar city homeowners from getting both a historic rehab tax credit and a homestead credit on the same house at the same time. If that were the case, it'd be an issue for the 280 owners who currently enjoy both tax breaks. The law states that “the historic property tax credit does not apply to any property for which any other tax subsidy from the City, whether in the form of a tax credit, payment in lieu of taxes, or otherwise, is being received or has been applied for.” Here's the key question: Is the homestead credit a “city subsidy” in this context?

Businesses can receive a $5,000 tax credit for each out-of-work Marylander hired this year, under a plan nearing final approval in the General Assembly. Gov. Martin O'Malley pushed the tax credit as a way to stimulate hiring at a time when the state faces a 7.5 percent unemployment rate - the worst in a quarter-century. Lawmakers increased the credit from the $3,000 O'Malley proposed. The House of Delegates approved the Senate's legislation Wednesday, but the two chambers must agree upon slight changes added by the House.

Supporters of a business tax deduction to help private and public schools that has failed in past legislative sessions hoped this year would be different. Plans by the Archdiocese of Baltimore to close 13 schools brought attention to the bill, Gov. Martin O'Malley wrote a letter endorsing it and, for the first time, Archbishop Edwin F. O'Brien made the trip to Annapolis to lobby for passage. But with only days left in the session, the legislation has again stalled in the House committee where it has died twice before.

If James "Buzz" Cusack and his daughter, Kathleen Lyon, have their way, they'll be cutting ribbons by Christmas for a restored Senator Theatre that will preserve the original cinema and add three screens and a small restaurant. Gov. Martin O'Malley announced Tuesday that they would receive $300,000 in a 2012 Sustainable Communities Tax Credit — administered by the Maryland Historical Trust and known previously as the Historic Tax Credit — to rehabilitate the movie house, a North Baltimore landmark since 1939.

Archbishop Edwin F. O'Brien invoked the recently announced archdiocesan school closings in urging state lawmakers Wednesday to approve a corporate income tax credit as a "critically important tool" to help both public and private school students. Appearing before the House Ways and Means Committee, O'Brien said difficult decisions had to be made to "avoid losing these schools one by one" and he argued that the business tax credit could be part of the solution. "We pledge to leave no stone unturned" to sustain the Church's commitment to education, said O'Brien, one of several witnesses to appear for and against the measure in a hearing that went on for more than three hours.

A grab bag of housing-related legislation passed in the Maryland General Assembly's recently completed session. Here are the highlights: Homestead credit penalties ( HB 1081 ): Authorizes local governments to hit people with bigger penalties if they are found to be receiving a Homestead Property Tax Credit (or credits) they don't qualify for and "willfully misrepresented facts" to get the break. The homestead credit caps big tax increases as a result of property appreciation, but it is only for primary residences.

Last week while reporting on the latest tax credit mess , we learned about an obscure 1999 Baltimore law that appeared to have potentially big consequences. It seemed to bar city homeowners from getting both a historic rehab tax credit and a homestead credit on the same house at the same time. If that were the case, it'd be an issue for the 280 owners who currently enjoy both tax breaks. The law states that “the historic property tax credit does not apply to any property for which any other tax subsidy from the City, whether in the form of a tax credit, payment in lieu of taxes, or otherwise, is being received or has been applied for.” Here's the key question: Is the homestead credit a “city subsidy” in this context?

Five Baltimore homeowners have been getting erroneous historic rehab property tax credits for the past two years. Once the errors were discovered, the city was quick to demand that all five pay the money back - and within 30 days, thanks. But city officials took a much more leisurely pace when it came to answering basic questions about these mysterious tax-breaks-that-shouldn't-have-been. After the city told us it had no record of historic credit applications from any of the five, it took a good month to convey (or perhaps determine)

Over the past two years, Maureen Coyle has received $5,700 in property tax breaks that the city admits she never requested for her Patterson Park rowhouse. Now the city is demanding full repayment by month's end. If she doesn't or can't pay by then, the city says she'll be hit with $990 in penalties and interest. "This will definitely be a hardship to put it mildly," said Coyle, a social worker who doesn't have "a spare $5,700 just hanging around. " Coyle is one of a handful of city homeowners who suddenly owe back taxes after The Baltimore Sun reviewed a random sample of homes receiving a tax credit for renovations to historic properties.

The General Assembly has approved a bill imposing steep penalties on homeowners who are caught getting homestead property tax credits they're not entitled to receive. Fines would equal 25 percent of any undeserved break - a considerable punishment given that the credit currently cuts the tax bills of many Baltimore homeowners by thousands of dollars per year. "Hopefully this significant penalty will deter people from abusing this tax credit in the future," the bill's sponsor, Del. Samuel I. “Sandy” Rosenberg, said Saturday evening after final passage by the House of Delegates.

Tens of thousands of Maryland homeowners who haven't already applied for the Homestead Property Tax Credit have until the end of the year to do so or lose the often-valuable break. The deadline was set so long ago — 2007 — that some residents might not remember if they applied. State assessors, hoping to cut down on anxious calls, launched an online feature Monday that notes whether a property's application is in and processed. "We get such tremendous volume of calls, and one of the unfortunate things is, when people do call … they sometimes get a busy signal," said Robert E. Young, director of the state Department of Assessments and Taxation.

Supporters of a state tax credit to help public and private schools say the defeated measure was poorly handled by a key legislative committee, but they say they'll continue the fight. With a letter of endorsement from Gov. Martin O'Malley and the decision of the Archdiocese of Baltimore to close 13 schools bringing new attention to the bill, backers had hoped the third attempt at passage in as many years would succeed. The legislation did get one step further than it has before in being voted upon for the first time by the House Ways and Means Committee, but that was little consolation to supporters.

House and Senate negotiators squared off Monday over the issue of taxes -- and the question wasn't whether to raise them but who should pay. The five senators and five delegates on the revenue bill conference gathered in the afternoon at the Legislative Services Building next to the State House. It was part of a complicated series of negotiations that began Monday on the various bill that make up this year's budget package -- including the budget bill itself, a companion measure needed to achieve balance and the tax measure.