Business equipment valued less than $2K won’t be taxed

 

By Dawn De Busk

Staff Writer

CASCO — Casco Selectman Mary-Vienessa Fernandes has been talking to the town’s tax collector.

Not only that, Fernandes has been studying the Maine Municipal Association (MMA) guidelines for personal property taxes, reviewing the assessed values of the recent inventories completed by Casco-based business owners, and considering the long list of overdue personal property tax owed to the town.

About six months ago, Fernandes took on the task of drafting a personal property tax policy for the Town of Casco to adopt in order to more effectively collect the business equipment tax.

The good news is that a few small business owners will be “off the hook” as of May 2017. Those people who were previously billed for business equipment assessed at values of more than $1,000 and less than $2,000 won’t be billed anymore.

During the Casco Board of Selectmen meeting on May 10, the board voted on a cutoff of $2,000 worth of assessed value before a bill is generated.

Currently, the town had been applying the personal property tax to business equipment with an assessed value of at least $1,000. With the current mil rate, that amounts to a $14 personal property tax bill.

Most of those are paid, and multiple $14 bills that are paid do add up to a nice revenue stream for the town, Fernandes said.

However, on the flip side, when the bill is ignored, the cost of pursing that outstanding bill is more than what is owed. That is something board members discussed during their May 10 meeting.

Also, the board voted unanimously to set a cap of $5,000 assessed value (or a $70 tax bill) when it comes to filing a Uniform Commercial Code (UCC) claim.

Filing a UCC claim is a method for regulating liens against business equipment owned by a tax debtor. It costs about $35 to file the UCC claim.

According to Casco Town Manager Dave Morton, what prompted the change is that the Town Assessor Renee Lachapelle would like to know at what point the town should be assessing value.

“From her experience, that ($1,000) is very low” and other towns have a higher threshold, Morton said. When asked for a recommendation, the town assessor suggested $5,000.

At first, during the course of discussion, Selectman Calvin Nutting disagreed with raising the amount of assessed value to be taxed.

“I think they should be billed. Whether they pay it or not is another thing. It is fair taxation. You should bill them, and if they don’t pay, we won’t collect,” he said. “It seems ethically inappropriate to charge some and not charge those under a certain amount.”

While expressing his opinion, Nutting admitted to playing the devil’s advocate.

What is to stop business owners in Casco from reporting less value to stay below the $2,000 assessed value cap, and to avoid paying taxes, Nutting asked.

Also, people might purposely not pay the personal property tax if the bill is less than the amount the town has capped that at, Nutting said.

That is already happening, Ferandes said. People have ignored the bills that are too small to be worth the town’s time and money, she said.

Ferandes advocated for a capping point, saying, “There is a reason they have cutoffs. I won’t vote to enforce a policy to collect $7 and spend $35 to do that.”

The town has gotten more aggressive with outstanding real estate taxes — putting liens on properties and foreclosing on several parcels, which were put up for sale to the public, she said. That stance has helped the town increase its property tax revenue.

“Everyone should pay,” she said, adding that the enforcement cost is the issue. “We have to consider what is practical cost wise for the town.”

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