Hancock Lumber is the only business in Bethel that pays personal property tax because it is above the threshold set by the Bethel Assessor Board. Rose Lincoln/Bethel Citizen
BETHEL — The town Board of Assessors received a letter from the state indicating that the town may not be following certain property assessment requirements, according to board members.
The board discussed the letter from State Tax Assessor Jerome D. Gerard at its Nov. 8 meeting, which had been sent to the town the day before.
“It has come to our attention that certain municipalities in Maine may not be in compliance with the requirement to properly assess personal property within their municipalities,” the letter said.
“I’m assuming this is a parting gift from our last manager,” Board Member Ron Savage said, referring to former Town Manager Natalie Andrews, who resigned in August.
Savage and other members in attendance, Chair Robert Everett, Michele Cole and George Angevine, chose not to take action, continuing the town’s noncompliance of the state statute.
Town Assessor Rob Duplisea said all the towns he assesses received the letter.
“This is nothing more than a nag letter from the state, reminding us of our responsibility,” Duplisea said. “We’ve already talked about what they do to a town that doesn’t assess, they add in value … they can’t mandate that we do anything … this shouldn’t change your view on anything, cause nothing’s going to come of it.”
“They didn’t even take the time to do a signature. It was a bulk letter,” said Cole.
PERSONAL PROPERTY TAX
The Board of Assessors have been tabling personal property tax discussions and decisions since around 2008 when Scott Cole was town manager.
“It’s unusual (the non-compliance), but that is what has been decided in year’s past, and the board is steadfast that they agree that they want to stick to it,” Duplisea said after the meeting.
Personal property tax is a business tax on business-related equipment. It is unrelated to personal property.
“It is difficult to assess, but there is a general requirement that all municipalities go through the motions and at least make an effort to identify it, tax it as of April 1, and collect it,” Attorney Zachary Brandwein of Bernstein Shur Law Firm said at a June 29 assessors meeting.
The Business Equipment Tax Exemption (BETE) is an exemption for business equipment that is used in the furthering of the business. The business owner has to apply for the exemption and it has to be assessed, but they will likely receive 100% of the tax exempted. The state reimburses the town 50%. Not assessing personal property tax means the town is missing out on revenue that could potentially reduce their property taxes.
Duplisea said out of the 74 towns his company assesses, 15-20% don’t assess personal property.
He said many of the small towns that are not in compliance were concerned and called him after they received the Nov. 7 letter. Duplisea said some of the towns he assesses are so small there isn’t much of anything to assess.
TAX VALUE LOSS
The BETE’s are sent to the town because the business owners are not aware that Bethel is not assessing.
At a meeting earlier this year, Assessing Assistant Courtney McPherson said there are 56 unsolicited Business Equipment Tax Exemption forms at a value of $6.9 million; the depreciated value is $3.9 million. These are companies that automatically send the form, she said.
Duplisea said the amount from those unsolicited forms equals $50,310 of uncollected town dollars. The number would be higher if compliance was sought by all businesses.
Duplisea is the town assessor in Newry as well. He said Sunday River keeps a list of all their assets and sends it to him, “millions of extra value every year and we don’t even have that brand new fancy eight person lift in place … Their personal property is all exempt … We get 50 cents on the dollar and they don’t pay anything.”
“(In Newry) they are taxed on $25 million, Newry then gets between $160,000 and $180,000 back from the state.” Duplisea said.
The number would be higher but they have more homestead exemption dollars in Newry, he said.
After the municipal tax rate calculation form is completed, the personal property tax will likely add value and lessen the mill rate. Homeowners multiply their town’s mill rate by each $1,000 of their home’s assessed value.
Bethel’s mill rate is 12.9%; Newry’s mil rate is 8.5%. A $500,000 home would be taxed $6,450 in Bethel. Taxes on a comparable house in Newry would be $4,250.
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