York County won’t pay for her costly mistake. There may be too many more like it.

It’s literally a taxing question.

If York County didn’t do anything wrong, what responsibility does the county have making a situation right?

Concerned that a wave of county residents might come looking for their own tax refunds, York County Council voted March 20 not to repay a Rock Hill resident for 10 years of overpaid taxes. The county agrees a mistake was made, but also emphasizes that it wasn’t the county’s mistake.

“Mistakes happen, but the mistake’s not the county’s fault,” said Councilman Michael Johnson.

Homeowners who live at a residence pay a 4 percent tax rate. Rental properties and businesses pay 6 percent, along with a tax to help fund school operations. The Rock Hill resident provided verified documents showing she lived at her home since 2005, yet was paying the higher rate.

State law allows someone who catches the mistake to collect the past two years of overpaid funds. The resident collected for 2015 and 2016, but had to petition Council for the amount since 2005. She paid $1,007 more than she had to for those 10 years. She also paid almost $1,470 extra to the City of Rock Hill.

Both the county manager and county tax assessor recommended refunding the county portion.

“I think it’s the right thing to do,” said Rob Weaver, tax assessor.

Johnson said the refund question at the table involved a “minimal” dollar amount, but the next one may not. Or the next several.

“I’ve got about 20 to 30 people a year who role through my office who have this exact problem,” Johnson, a Fort Mill-based real estate attorney, said. “Every time a do a refinance, it seems, that I bump into this.”

Johnson, a Tega Cay resident who represents Dist. 1, said he works 700 to 800 closings a year, and his last instruction to buyers is to fill out a form and send it in to the county stating the home will be owner-occupied. Every time a deed is filed in the county, a form is mailed to the home. The homeowner is responsible for getting the home taxed at the correct rate.

“I say that at every closing I do,” Johnson said. “And it concerns me, I’m telling you, you’re about to open up hundreds of thousands of dollars that are about to start flowing back out of our coffers,” if the county refunds the over-payment, he said.

A property near his would pay about $10,000 more in taxes without the owner-occupied status. It isn’t unique.

“In the Fort Mill Township, everything above the river, the difference in taxes are 130 percent,” Johnson said. “It is more than double your (Rock Hill) taxes. We’re talking about giving back a whole bunch, not a little bit of money, but a whole bunch of money for up to 20 years.”

Weaver said right now about three cases come to his office each year looking for refunds.

“These cases do happen,” he said. “They don’t happen a lot.”

Most take the two years of refunds allowed by state law without coming to Council, but choose not to go further. Weaver said the Rock Hill resident “definitely lived there, she just didn’t know to fill out the applications.” His recommendation didn’t change even when questioned on the possibility of more cases following a new precedent.

“I feel like we ought to refund it,” Weaver said. “I understand the concerns.”

Councilman William “Bump” Roddey spoke with the resident prior to the recent meeting, which he missed. Roddey didn’t expect the refund to be controversial, and he is looking to get it back on a future agenda for reconsideration.

“I thought it was going to be a slam dunk case,” he said.

Along with the county staff recommendations, Roddey sees the issue in simpler terms. A resident paid too much. The county should refund her.

Otherwise?

“It could make us look pretty bad,” Roddey said. “For me, it’s the right thing to do.”

The length of time makes this case “highly unusual,” Roddey said, since most times a home taxed at the higher rate will bring an escrow up short the first year, or otherwise trigger the homeowner to take a closer look. Someone paying cash for a home likely would be experienced enough to know how much to pay.

The resident, Roddey said, was a recent Winthrop University graduate buying her first home. She since provided “solid proof that she’s lived in the home.”

“She had never been through the home-buying process before,” Roddey said.

The county decision will impact whether Rock Hill refunds any money, and could impact a decision by the Rock Hill School District. Roddey feels it’s a bad look all around to deny the resident.

“We’ll be hurt more if we don’t do the right thing,” he said.

Councilman Robert Winkler said his business often deals with powers of attorney, which have to be registered at the county courthouse. Often people have no idea. So while he appreciates what Johnson does for his clients, he could understand confusion or omission.

“Not all attorneys do a thorough job,” Winkler said.

Councilwoman Allison Love said she believes, as Johnson said, the existing law is there for a reason. Going back beyond two years could set a dangerous precedent.

“Paying it undermines the two-year term that we have,” Love said.

Johnson said “the law is what it is for a reason” and he hasn’t heard “a rational basis to do it, knowing what’s going to come afterward.”

“There is no fault,” he said.

“The county has no affirmative duty to knock on everybody’s door and say ‘is this your primary residence or is this your secondary residence?’ That’s not our job. Our job is to make sure that there are forms available for you to fill them out and get your primary residence (status). We did that.”

This story was originally published March 28, 2017 at 11:55 AM with the headline "York County won’t pay for her costly mistake. There may be too many more like it.."