Naples board gets tax education

By Dawn De Busk

Staff Writer

NAPLES — The town assessors recommended that the Town of Naples take the friendly approach to gathering personal property tax lists from the owners of local businesses.

On the top of the list is public awareness — letting people know that this process is taking place. Next is getting an accurate list of all the businesses in town, which might require the help of the town staff and area chambers of commerce. Then, the town will send carefully-crafted letters to all Naples businesses, asking the owners to provide an updated list of taxable items by a certain date. (For those who do not respond by returning the taxable inventory list, the assessors can assign a tax based on the type of business.)

“After those two steps, we create a new inventory of businesses and meet with the board to talk about it. You will know things that we don’t. We’ll find out what we got and what we missed,” Michael F. O’Donnell said.

Personal property tax, or business equipment tax, was the topic of a workshop held by the Naples Board of Selectmen on Monday.

Mike O’Donnell accompanied Certified Maine Assessor (CMA) Paul Binette, who is contracted as the town’s assessor. Both men are employed by O’Donnell & Associates, Inc., which is located in New Gloucester.

The hour-long workshop kicked off with a request from Selectman Dana Watson.

Watson suggested that, to be fair, all citizens should pay a personal property tax on items like home computers, refrigerators and lawn mowers. The people who own businesses in the Town of Naples pay these taxes — resulting in revenue that helps to pay for the school district’s budget, he said. Those citizens who do not own a business should share the burden of having personal property taxed, Watson said.

O’Donnell explained to the board why private citizens are not required to assess taxable items in their home.

“Most of that is not taxable,” he said, specifically citing furniture in an individual’s home.

“If you were a mechanic and brought your own tools to jobs, those tools would be taxed,” he said.

“Private people are exempt unless one tool is worth more than $1,000,” he said.

A good example of a nontaxable item would be a used Craftsman lawn mower that is not worth $1,000, he said.

Later in the discussion, Watson asked “What is least painful thing to do?”

Binette replied.

“Let’s include a tax list of all Naples businesses in the Town Report. That is not a bad idea,” he said.

“We craft a personal property letter to hand to new business owners, to take the friendly approach,” Binnett said.

“Taking the friendly approach is, well, the Naples approach. If that doesn’t work, you may want to take the approach that other big cities take,” Binette said.

“But do that first,” he said.

“I don’t charge taxpayers, if they want help with” figuring out which tax-reimbursement program better suits their business, Binette said.

Those state-run programs are called the Business Equipment Tax Reimbursement Program (BETR) and the Business Equipment Tax Exemption Program (BETE).

BETR was established in 1995. It allows business-owners to receive a reimbursement from the state, provided the personal property tax is paid to the town. There is a one-year delay between paying the tax and filing for BETR.

With BETE, some entrepreneurs qualify for an exemption from paying personal property taxes. However, so that the municipality’s coffers do not suffer, the state reimburses 50% of the tax debt to the municipality.

Ideally, the timeline for putting businesses on the personal property taxes account list is prior to the town’s tax commitment this summer, O’Donnell said.

The assessors will need to “get together with the board to see how the final commitment will look. How big of a shift will it (personal property taxes) make before the taxes are committed,” he said.

Both Binette and O’Donnell pointed out that creating a taxable inventory list is a bit of a burden for business owners.

As stated in a letter from O’Donnell & Associates to the selectmen, which was dated March 7, “How you ask for personal property inventories ranges from polite, informal requests to legal demands. We prefer to reserve legal demands for appeals and situations where informal requests fail.”

“The time and complexity involved in developing property lists and completing reimbursement and/or exemption paperwork makes it difficult for property owners to participate without resentment,” the letter said.

“The point to remember is we are asking owners to participate in a laborious task that results in sending them a tax bill. We owe it to them to make the work as easy as possible,” the letter said.

O’Donnell said most small businesses prefer to keep it simple. “They would just as soon pay the tax bill and be done with it,” he said.

“Use a normalized number. Most businesses don’t have a lot of personal property, and they want a basic bill,” he said.

He cited an example of a person doing work from their home, using a desk and a computer with equipment that is worth around $5,000.

The quickest route is to identify the business and categorize it as a small home-based business, and tax them a set amount like $75, O’Donnell said.

“The goal is a system that people buy into. It is reasonable to pay,” he said.

Selectman Kevin Rogers responded. “Public awareness is a big thing. It has been a quiet shadow over here,” Rogers said.

Town Manager Emphrem Paraschak agreed. “It has been on the back burner,” he said.

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