County auditing tax exemptions

SANDPOINT — The jig is up for Bonner County landowners who have been claiming Idaho’s homeowner’s exemption when they’re not entitled to it.

The assessor’s office and the Idaho State Tax Commission are teaming up to audit the 11,000 homeowner’s exemptions in Bonner County to verify who qualifies and who doesn’t.

Those who don’t qualify but have been receiving the exemption could be forced to repay their ill-gotten gains dating back as far as seven years. They also face penalties and interest, according to county officials.

“It’s been on my radar for a long time. When I first took office, I realized that we had a potential problem,” said Assessor Jerry Clemons, who was voted into office in 2006.

Homeowners in Idaho can apply for the exemption if their place is an owner-occupied, primary residence. The exemption applies to 50 percent of the value of the residence and up to an acre of land or $100,938, whichever is less. The taxes are computed on the nonexempt value.

One of the qualifications for obtaining the exemption is the filing of a full-year resident state income tax return. Although not everybody in Idaho is required to file them, the county decided to crosscheck the names of those receiving the exemption with the tax commission’s income tax roster.

“If they didn’t (file a return), that’s a red flag. It doesn’t necessarily mean that they didn’t qualify, but it’s still a red flag that we have to check,” said Clemons.

Clemons said those who aren’t required to file the income tax return would have to offer proof to the county that they are primary residents.

Those found to have an exemption to which they’re not entitled would receive a bill from the treasurer’s office. Those challenging their bills would have to plead their case to the commission, which acts as the county-level tax appeal board.

County commissioners and Treasurer Cheryl Piehl signed off on the plan on Tuesday.

“A lot of folks have been taking advantage,” said Commission Chairman Lewis Rich.

After the meeting, Clemons pointed out that ridding the tax rolls of fraudulent exemptions would lower the tax burden on landowners. The audit could take up to a year to complete, although the county plans on sending out a mass mailing advising landowners with the exemption that the exemptions are being scrutinized.

Clemons hopes to eventually address the matter of timber and forestry exemptions available to landowners.

“That’s something that I want to be able to keep up on and haven’t been able to yet,” he said.