Town targets tax credit violators

Council OKs changes; re-certification process for homeowners to proceed

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A major re-certification effort is set to move forward for those who receive tax credit for living in their homes, with Mayor Joseph Polisena placing a particular focus on targeting those he says are abusing the system and placing a burden on taxpayers.

“I think it’s very, very important to ensure that every household is paying their fair share,” he said. “I think it’s long overdue.”

The Town Council last week unanimously approved the changes to the Homestead Exemption, through which Johnston homeowners can qualify to pay taxes on 80 percent of their property rather than the full value. The credit has been in place since 2007, when the mayor pushed for its institution early in his first term.

Unlike other communities, Johnston has not had procedures in place through which homeowners must periodically re-apply to receive the credit. Polisena said his aim with the changes is to root out those who are violating the spirit of the credit, such as landlords who live out of town or those who register their vehicles in other states, such as Florida.

The mayor also said he is concerned over credits going to households used as an address through which out-of-town students attend Johnston’s schools.

He pointed to recent cases brought to the tax assessor’s office by a truancy officer in which families of two students had used leases as proof of residency in the town. In both cases, he said, it was found that the owners of the homes being leased were receiving the Homestead Exemption as if they were residents of the properties.

As part of the recently approved changes, the town will be able to permanently disqualify those found to be receiving the exemption without meeting the requirements.

“We’re not looking to throw the legitimate people who live in the town and pay taxes off the Homestead Exemption,” the mayor said. “I think we have to send a message, loud and clear ... If you don’t [re-certify exemption recipients], people fall through the cracks.”

The re-certification program will require homeowners to re-apply for the exemption. Polisena said notices will be going out to households in the next 30 to 60 days with clear instructions on the process.

The mayor said several key pieces of documentation will be required to receive the credit – a driver’s license or state identification card, a motor vehicle registration and a state or federal tax return. All must bear the address of the property for which the exemption is being granted.

Polisena stressed that homeowners will need to re-apply, or will lose the exemption. The notices to be sent in the coming weeks, he said, will be “clearly marked” as pertaining to the Homestead Exemption.

“If they throw the form away ... they’re going to lose [the exemption],” he said.

In another change, owners of multi-family buildings who rent will now be eligible for reduced tax credits through the program.

Those owning two-unit buildings and renting out one of the units will be eligible for 50 percent of the credit, or 10 percent off the property’s value. Those owning three-unit buildings and renting out two will be eligible for a third of the credit, or just under 7 percent off the property’s value. The exemption will not be available to those owning buildings with four or more units. The residency requirement remains for multi-unit building owners.

“They do that in Providence,” the mayor said of the multi-unit policy. “We’ve been more than generous over the years.”

The mayor did note that other property tax exemptions exist for seniors and veterans.

Polisena said the re-certification process should be complete by the end of May, in time for the issuance of tax bills. The town will also conduct a comprehensive review of records as part of the process.

“This is going to be a very methodical process,” he said. “We’re going to go after these people.”

Polisena said those currently receiving the exemption without meeting the requirements will not be permanently disqualified if they come forward during the process. Two people have already done so, he said.

The mayor said the town will also continue to re-certify recipients of the credit periodically, although it remains to be decided whether that will occur every three or five years. He plans to discuss that issue with the Town Council.

In the end, Polisena describes the push for re-certification as being focused on fairness for those who live in town and pay their taxes.

“This is serious business,” he said. “As far as I’m concerned, [violators are] stealing from my taxpayers.”

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