Advertisement

Commissioners express concern over tax 'loophole'

April 18, 2006|by TARA REILLY

WASHINGTON COUNTY

Some Washington County Commissioners think granting exemptions or reductions to the excise tax for work-force housing projects might end up being another "loophole" for developers to pay a lower tax.

Commissioners Vice President William J. Wivell and Commissioner John C. Munson expressed those concerns by phone Monday.

Commissioner James F. Kercheval agreed that the possibility exists that developers would take advantage of excise tax exemptions, but the possibility would be less with nonprofit groups building work-force housing.

The commissioners are expected to discuss a request today to reduce the existing excise tax on a proposed work-force housing apartment complex from $15,500 per unit to $1 per square foot.

Advertisement

The county's current excise tax ordinance charges a $1-per-square-foot tax on homes and multifamily units up to 1,500 square feet, but that provision does not include apartments.

SIS Properties LLC plans to ask the commissioners today to lower the tax to the $1-per-square-foot rate for a proposed 24-unit apartment complex in Maugansville, according to the commissioners' meeting agenda.

The apartments would be one- and two-bedroom units adjacent to the company's existing Greenside Apartments, according to the agenda.

Wivell was concerned about nonprofit groups joining with for-profit companies to construct work-force housing. Those companies then earn a profit, while paying a lower excise tax, he said.

"The only way to really deal with it is, just don't grant exemptions," Wivell said.

When asked if not granting exemptions would help the work-force housing issue, Wivell said, "No, but I don't think you're going to help the work-force housing issue on a piecemeal basis, either."

Munson agreed that no exemptions might be the best solution. He said he didn't think developers would pass on any savings from an excise tax exemption or reduction to the home buyer or renter.

"It could be a loophole, you never know," Munson said. "I think it's best to not have any exemptions at all."

Munson said it might be possible for the county to create a program that refunds homeowners of work-force housing the cost of the excise tax if they meet certain conditions, such as living in the home for a certain amount of time.

That way, the county would know the homeowner is benefiting from any excise tax exemption or reduction, he said.

"That's the only way I know to be sure the person who needs work-force housing is going to get it," Munson said.

Kercheval said he thought there would be better protection against the work-force housing "loophole" on homes built by nonprofit groups. He said the purpose of such groups is to provide affordable housing.

"These groups aren't in it for their own personal profit," he said.

The Herald-Mail Articles
|
|
|