• Filing penalty goes up in Montpelier
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     | July 26,2014
     

    MONTPELIER — City homeowners who were late filing their Vermont homestead declaration form will face a higher penalty this year.

    That is because, for the first time, the Montpelier residential education tax rate is higher than the nonresidential rate.

    The penalty will be 8 percent of the education taxes due on the property instead of 3 percent, according to Finance Director Sandy Gallup.

    The rates are set in state law, she said in a recent memo to the City Council and staff, and hinge on which local education tax rate is higher.

    The penalty will be assessed for people who missed the April 15 deadline, and will be added on this year’s tax bill, Gallup said Friday.

    “Based on decisions the Legislature made this year, the residential education rates increased substantially,” Gallup said. “Also, local cost (per) student has an impact on residential education tax rates. ... Many towns have residential rates that exceed nonresidential rates.”

    The penalties are collected and retained by the city, Gallup said. “For the average homestead property, this (change) would mean an increase in penalty from $110 to $294,” she wrote.

    The state statute allows the town or city to waive or reduce the homestead declaration late filing fee, Gallup said.

    “It wouldn’t necessarily be by an appeal process. It would be the City Council making a decision to eliminate or maybe reduce the 8 percent late fee for all late filers,” she said. She recommended the council address this at its August meeting, when members expect to discuss the possibility of lowering the late payment fees for property taxes.

    According to the Vermont Department of Taxes website, appeals of the penalty can be made to the town where the late filing penalty is billed and collected. The law provides for a hardship appeal, the website notes. Hardship is defined as: full-time active military duty outside of Vermont; serious illness or disability of the homestead owner; or serious illness, disability or death of an immediate family member of the homestead owner.

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