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Md. Property Tax Trips Members

Despite representing California’s 5th district since 2005, Rep.Doris Matsui (D) declared her permanent residence in Maryland in 2008and was approved to receive tax benefits from the state.

The Maryland Department of Assessments and Taxation said Thursdaythat an individual representing Matsui contacted the state to requestthat the homestead designation be removed from her home in Chevy Chase— and for a bill to repay tax credits previously applied to the home.

Matsui’s office acknowledged that the Californian had applied forand received a homestead exemption in Maryland as recently as March2008 but could not confirm that the lawmaker had requested a statuschange after being contacted by Roll Call one day earlier.

“Staff called to verify that they had the [application] form when[the state] made the decision. I’m not aware of anything else,— Matsuispokeswoman Alexis Marks said.

Marks added that Matsui also maintains a California residence butdoes not receive a property tax benefit for that home, whichSacramento tax records confirm.

According to Montgomery County tax records, Matsui’s home, listedas her “principal residence,— was valued at nearly $1.4 million in2008. The home received $2,800 in tax breaks in its most recent bill,including a nearly $2,000 discount from the county.

Matsui purchased the Maryland home in 1979 with her late husband,former Rep. Robert Matsui (D-Calif.). Doris Matsui, a former lobbyist,also served in President Bill Clinton’s administration before beingelected to fill her husband’s House seat after his death in 2005.

Although the Maryland tax office is allowed to bill up to sevenyears of back taxes, it typically reserves the maximum for offenderswho have intentionally violated homestead laws, such as individualswho rent out a property while still receiving the tax break, explainedBob Young, associate director of Maryland’s tax office.

Instead, Matsui will be required to pay back taxes dating to 2005.

“Just because they’re Congresspeople, I don’t want to treat themfavorably. I don’t want to treat them unfairly either,— Young said.“The same rules that would apply to any other homeowner apply tothem.—

Young noted that at the time the Matsuis purchased their home in1979, state policies likely would have automatically granted theproperty a homestead deduction if they opted to receive their tax billat the same address as the home.

Maryland state lawmakers implemented more stringent requirementsfor the homestead tax break in 2007, requiring all homeowners tosubmit a questionnaire to continue receiving the tax break, which isdesigned for permanent residents.

Among the qualifications, homeowners are asked whether the propertyis a principal residence, as well as whether the address is used tofile state and federal income taxes, procure a driver’s license andvehicle registration, and register to vote.

Matsui’s office said the lawmaker is registered to vote inCalifornia and maintains a Golden State driver’s license. She ownsmultiple vehicles, with at least one registered in each California andin Maryland, Marks said.

Asked how Matsui qualified for the tax break, Marks said, “Shesubmitted the form [to Maryland] and they gave it to her.—

Publicly available Maryland property tax records also revealed atleast three other House lawmakers with Maryland properties listed as aprimary residence.

In two of those cases, Maryland tax officials acknowledged thatstate or county employees inaccurately entered the status intorecords, and not at the request of the lawmakers.

Both California Reps. Adam Schiff (D) and Dennis Cardoza (D) arelisted in county tax records as primary residents for their homes inMontgomery and Anne Arundel counties, respectively.

According to Young, Cardoza’s tax status was entered incorrectlyinto state property records based on another legal document requiredto finalize the home’s purchase.

“We coded it ourselves as a principal residence based on thatsettlement document. Then we sent him an application [for thehomestead tax break], he did not return it, which says to us he didnot apply for it,— Young said.

Moreover, Young noted that Cardoza, who purchased his home in May2008, did not receive any tax benefit based on his status, sinceMaryland homestead laws do not apply to properties during the firstyear of ownership.

“I specifically did not request it,— Cardoza said in a telephoneinterview last week.

“I specifically asked for it not to be done because I did not wantto violate the law,— he added. Cardoza explained that he has sought tobe adamant about his tax status, noting that multiple homestead-taxclaims impaired the campaign of an opponent during his first campaignfor the state legislature.

“I’m going to raise hell if they’ve done it incorrectly,— Cardozasaid. In a subsequent interview, the House Member said his officecontacted the Anne Arundel County tax assessor and was informed theoffice had used the longtime standard of using a mailing address todetermine primary residence.

Montgomery County tax officials confirmed Schiff’s tax status wasalso incorrectly entered into tax records when he purchased theproperty with his wife, Eve, in 2003.

According to copies of sales documents provided by Schiff’s office,the lawmaker correctly marked a box stating the home would not be hisprincipal residence.

“The above reference property was incorrectly listed as owneroccupied by our office. The Intake Sheet filed with the deed (copyincluded) stated that property would not be the owners [sic] Principle[sic] Residence,— Roberta Ward, manager of the Montgomery Countybranch of the state’s tax office, wrote in a copy of those documentssent to Schiff.

According to tax records, Schiff has received a total of $168 intax credits since purchasing the home, now valued at more than$890,000.

Similarly, in the third case, a Prince George’s County condominiumowned by Rep. Edolphus Towns (D-N.Y.) is also listed as a primaryresidence, although he did not apply for the status through athree-year statewide audit that began under the stricter rules, Youngsaid.

Because Towns and his wife, Gwendolyn, purchased the home in 1997prior to the rule change, they likely received the statusautomatically based on their mailing address.

“Obviously since we now know this is a Member of Congress … we’regoing to remove— the status, Young said.

According to county tax records, Towns has received less than $250in tax benefits to date on his 950-square-foot unit, recentlyreassessed at a value of $112,000. “He has never applied for specialtreatment,— Towns aide Jesse McCollum said.

Although Matsui has requested to pay back taxes, Young said thestate does not typically charge homeowners with back taxes if itdetermines a property inadvertently received the deductions and theowner did not actively seek to deceive the state.

“Our policy is that we will not take it away for back years. We’lldo it for current years,— Young said.

One other House Member, Rep. James Oberstar (D-Minn.), alsoreceives the Maryland tax benefit, albeit via his wife, Jean, who isthe sole owner listed on tax documents.

Maryland tax officials noted that state law allows a property toreceive the tax benefit if at least one individual listed on the deedqualifies for the homestead program.

According to the Montgomery County Board of Elections, JeanOberstar is a registered voter at her Potomac, Md., address.

“It’s his wife’s house. She is a resident of Maryland,— Oberstarspokesman John Schadl said. Schadl noted that Oberstar’s primaryresidence is a home in Chisholm, Minn.

In March, Maryland tax officials revoked the property tax status ofNew York Democratic Rep. Eliot Engel’s Potomac home and began a reviewof California Democratic Rep. Pete Stark’s Anne Arundel County home.

About 1.4 million Maryland homes currently receive the homesteadbenefit, Young said.

In addition, a Roll Call review of D.C. property tax records inlate March prompted city officials to amend the status of four Houselawmakers.

District officials accepted blame for improperly bestowing thecity’s homestead tax break on those lawmakers — Reps. Steve King(R-Iowa,), Mike Rogers (R-Ala.), Phil Gingrey (R-Ga.) and Tom Petri(R-Wis.) — but nonetheless issued bills for back taxes, penalties andinterest.

District records show another House lawmaker, Rep. Betty McCollum(D-Minn.), is also listed as currently receiving the homesteadbenefit, which can shave hundreds of dollars a year off tax bills andlimits annual increases.

According to tax records, McCollum’s Dupont Circle condominium,purchased in 2003, is valued at $115,000 for tax purposes, below itsfull assessed value of $253,000.

McCollum’s office did not respond to multiple requests for comment.

Under the District’s homestead program, a taxpayer who owns a homein the city and uses it as the principal residence receives areduction of $67,500 on its assessed value, or a savings of $573.75 onthe 2009 tax bill.

In addition, properties that qualify for the homestead deductionare also protected from considerable jumps in assessed value. TheDistrict caps those increases at 10 percent above the previous year’stax assessment.

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