Shaftsbury won't waive late homestead filing fee

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SHAFTSBURY — The Select Board has opted not to waive penalties this year for the late filing of homestead declarations by property owners.

The due date for the declarations — required to ensure that eligible owners are assessed the homestead, rather than the non-homestead, education property tax rate — ordinarily is April 15 each year, but the deadline was extended to July 15 this year amid the coronavirus pandemic.

Towns in which the non-homestead rate is higher than the homestead rate can assess a penalty of up to 3 percent of the education tax on the property, and the penalty can be as high as 8 percent in municipalities in which the opposite is the case, according to the Vermont Department of Taxes. Shaftsbury's current penalty is 3 percent, Town Treasurer Melanie Dexter said at the Select Board's Aug. 3 meeting.

If a declaration is not filed by mid-October, the property is classified as non-homestead and the owner "then must pay the higher of the two rates, a penalty, and any additional property tax and interest due," the state agency's website states.

Dexter said at the board's July 20 meeting that some towns were considering waiving their penalties "in light of confusion about what were due dates on taxes this year." Dexter, who has held her position as treasurer since 2015, said the town had never before waived the fees during her tenure.

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Typically 15 to 20 homeowners end up incurring the penalty in a year, Dexter said at the July meeting. The amount of revenue it yields varies depending on the value of those properties.

"It's not a lot of money to us," she said, adding that it instead functions as "punishment to get people's attention."

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The board did not take action on the matter at the July meeting but voted unanimously at the Aug. 3 meeting against eliminating the late fee.

"I don't think we should waive it," board member Art Whitman said before the vote, pointing out that filing the declaration does not require concurrently paying income tax. "It's a lot of work for Melanie if you don't file [on time]."

Dexter outlined arguments for and against waiving the penalty at the Aug. 3 meeting before the vote. She cited confusion over due dates, the fact that "we won't know the ultimate number of late-filed declarations until after tax bills are created" and the possibility that more people this year filed their own taxes or relied on out-of-state preparers unacquainted with Vermont tax law as potential reasons for jettisoning the penalty this year.

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On the other hand, reasons for not waiving the penalty include "resentment and confusion" that might result from "going back and forth on the penalty" and its purpose as an incentive to encourage on-time filing, according to her presentation.

The Londonderry Select Board, at the request of its listers, voted to waive the same penalty at a meeting last month. It wasn't immediately clear how many other towns in the region and state have weighed such a measure this year.

Vermont Tax Commissioner Craig Bolio wrote in an email on Tuesday that the decision to waive the penalty "is a local decision" over which his department does not exercise authority, "and we do not know how many have decided to authorize their local discretion to waive those penalties."

The Vermont League of Cities and Towns is not advising towns to act one way or another on the penalties and is not currently tracking how many localities have chosen to waive them this year, according to municipal policy advocate Gwynn Zakov.

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