The state and federal governments have pushed back the filing deadline for income taxes to July 15 to accommodate people dealing with problems caused by the novel coronavirus outbreak, but doing so has raised another issue.
“The federal guidance has changed the due date for the Vermont homestead declaration and Vermont property tax credit claims,” said Vermont Tax Commissioner Craig Bolio.
Normally the Homestead Declaration is due April 15, the same day as state and federal income taxes. The declaration deadline is tied to the state deadline, and moves with it, said Karen Horn, director of public policy and advocacy at the Vermont League of Cities and Towns.
This is an issue, since the Homestead Declaration determines at what rate a property will be taxed. Towns need this in order to send out tax bills.
“Every year, under the law right now, when you file your income taxes you have to file a one-page form that says your house and 2 acres is a homestead or that the property is not a homestead, it’s a business, a camp, a second home, anything else other than your primary residence and 2 acres,” said Horn. “The homestead filing deadline is automatically pushed at this point to July 15 because that’s when you have to file your income taxes.”
Bolio said some towns send out bills as early as July.
“We’re trying to figure out exactly what that means for them, and I’ve been in contact with VLCT trying to talk that through, but we don’t quite have answers for exactly how to navigate that yet,” he said.
Rep. Janet Ancel, D-Calais, chairwoman of the House Committee on Ways and Means, said the committee met via conference call Tuesday for the first time since the State House closed in order to slow the novel coronavirus. It will meet again Wednesday to gather more information.
“These due dates are complicated, and our relationship with the federal due dates is complicated, as well, everything has been written without any thought that we would be in a situation like the one we’re in right now,” she said.
Property tax due dates are set by towns, some have the dates in their charters, others set them by vote at Town Meeting Day.
“It’s a cash-flow issue, but it’s a significant one, it’s not minor,” said Ancel. “We’ve been hearing about a lot of significant issues over the past several days, this is one of them where it’s not obvious what the solution is.”
Horn said VLCT will meet with the House Committee on Ways and Means and likely pursue some option that allows for penalties and fines to be waived.
Bolio recommends people file taxes early, especially if they anticipate a refund, and to do so online if they’re able. “Anybody who can file electronically, even more than in normal years, we really encourage them to do that at this point,” he said. “It will result in a much, much faster refund and I contend that it’s much easier for the taxpayer. I know not everyone can, so we are still accepting mail returns, but if they are able it makes it a lot easier and a lot faster.”
He said the Department of Taxes is still operating. He’s shuffled staff to better process returns, and added that the extended income tax deadlines allow the department some added breathing room. He expects the filings to be spread out over a longer period, making them more manageable.