To cover tax, Martin pays $2,100

Secretary of State Mark Martin paid Benton County $2,100 on Monday to cover three years of improper homestead tax credits and three years of penalties.

Since 2004, Martin and his wife, Sharon, have apparently received $3,350 in homestead tax credits they shouldn't have gotten in Benton County. They received a tax credit on two houses -- one in Rogers and one in Prairie Grove, which is in Washington County.

The tax credit is available only for a property owner's primary residence. Under Arkansas Code Annotated 26-26-1119(a)(1), "No property owner shall claim more than one homestead property tax credit for each year."

Martin said he didn't know he was receiving two tax credits until Friday, when it was reported by a blog, BlueHogReport.com.

His primary residence is at 123 N. Pittman St. in Prairie Grove.

"At the first opportunity this morning we arrived at the Benton County assessor's office to make all the necessary corrections," Martin said in an email Monday. "We made an extraordinary effort to make this happen even though the assessor was not prepared to deal with these issues this quickly. We are now currently in full compliance with the tax requirements."

Even though he is legally in compliance, Martin said he'll meet with Benton County Assessor Bear Chaney and pay more of the back tax credits. Chaney was out of the office Monday.

"Additionally, my wife and I believe that as Christians, while not legally required, we should make arrangements to pay anything that we owe so that we might be above reproach," wrote Martin in the email. "Those arrangements will be made as the assessor's schedule permits. "

Susan Inman, Martin's Democratic opponent in the race for secretary of state, sent out a news release Monday saying Martin should repay the tax credits.

"I would like to say I am surprised that Mark Martin has made this error on his taxes year after year after year, taking tax cuts that were not lawfully his and depriving the taxpayers of thousands of dollars for his own personal gain," said Inman. "Unfortunately, this type of behavior is not out of character for Mark Martin."

Inman said she has only one house, in Little Rock, and she does claim the homestead tax credit on it.

Credits total $3,350

Based on records in Benton and Washington counties, the Martins received the tax credit in both counties from 2004 through 2013. The tax credit is $350 per year now. Before 2007, it was $300 per year. That would bring the total improper credit they received to $3,350.

When asked if he would repay the total $3,350, Martin replied, "We don't even know for sure that the total is more or less than $3,350 that you suggest. Whatever it is, we will pay it. However, all penalties have already been paid. There are no further penalties."

The Martins are only obligated under state law to repay the past three years worth of credits, which would be $1,050, plus a penalty of $1,050.

Arkansas Code Annotated 26-26-1119(2)(A) states, "If the county assessor determines that a property owner has claimed more than one homestead property tax credit in a year, in addition to repayment of the homestead property tax credit, the designated preparer of the tax books shall extend a penalty of 100 percent of the amount of the unlawfully claimed homestead property tax credit."

Mark and Sharon Martin both signed a document for the Benton County assessor on Jan. 15, 2001, stating that they owned a homestead at 18156 Posy Mountain Drive in Rogers and that it was their primary residence.

Sharon Martin alone signed a similar document for the Washington County assessor on Oct. 27, 2003, pertaining to the house at 123 N. Pittman St. in Prairie Grove. That document didn't contain any wording about it being a primary residence or whether the tax credit was already being claimed on another property -- wording that current documents include.

On Friday, Martin said the "checkoff" is "integrated into the mortgage loan process, and thousands of innocent Arkansan citizens are unwittingly involved."

"This is more proof of the complexity of the tax code and the need for it to be simplified," Martin wrote in an email Friday.

Sent to mortgage holder

Washington County Collector David A. Ruff said notices about tax credits are sent to companies that hold the mortgage to the property, not to the owner. So the Martins may have received no receipts indicating they were getting two tax credits.

Martin, who spent much of Monday digging through boxes of records, said that appears to be the case.

"At this time, it is my belief that those notifications go directly to the mortgage company," Martin wrote Monday.

The Martins' two-story, 1,620-square-foot house at 18156 Posy Mountain Drive in Rogers was built in 1996 and appraised in 2011 for $87,450, according to the Benton County assessor's office. The Martins have owned the land at the site since 1994.

The couple's 2,066-square-foot house at 123 N. Pittman St. in Prairie Grove is listed as one story and built in 1949, but Martin said it's actually a two-story house and over 100 years old. It has an estimated market value of $146,100, according to the Washington County assessor's office.

On July 27, the Arkansas Democrat-Gazette reported that Asa Hutchinson, the Republican nominee for governor, had taken tax credits on residences in both Benton and Pulaski counties in tax years 2008-11. Hutchinson repaid the extra credits for the past three years shortly before he said he intended to run for governor.

Then, on July 29, Hutchinson said he'd give Pulaski County $1,750 for improperly claiming the homestead tax credits there, even though the statute of limitations has expired.

The move came hours after Democratic gubernatorial nominee Mike Ross and Vincent Insalaco, chairman of the Democratic Party of Arkansas, called on him to make the payment.

Insalaco also criticized Martin.

Hutchinson said he would repay $350 for the tax credit he improperly received in 2008, plus $1,400 in penalties, and wasn't bowing to Democratic pressure.

"We want to put closure to this," he said.

If Pulaski County can't accept $1,400 in penalties because the three-year statute of limitations has run out, Hutchinson said he'll give the money to the county as a donation.

NW News on 08/19/2014

Upcoming Events