Politics & Government

A homeowner overpays the tax. Should York County give the money back?

A Fort Mill homeowner’s request for a tax refund dating back more than a decade is the second such request in a year York County Council has discussed.
A Fort Mill homeowner’s request for a tax refund dating back more than a decade is the second such request in a year York County Council has discussed.

York County Council typically doesn’t spend so much time voting on a few hundred dollars. But the relatively small request could have large and growing consequences, some council members say.

Council debated for almost 20 minutes at its Sept. 4 meeting whether to refund two years of tax money to a Fort Mill homeowner after he discovered he’d been paying the wrong tax rate on his home since 2007.

Homeowner Morgan Glenn was paying 6 percent, the rate for businesses and rental properties, instead of the 4 percent rate eligible for his Landsdowne Court primary residence.

Assistance county manager Kevin Madden said Council ultimately approved by a split vote to refund Glenn “several hundred dollars,” compensation for the last two years only. By contrast, Council approved more than $1.2 million in various projects in a single vote, without discussion.

“If we’re going to set a precedent where everybody is going to get an extra two years in York County,” Madden said, “it’s not going to break us.”

It wasn’t the first time a homeowner made the request.

“This is probably the last time I’m going to do this, just based on the wisdom of everything being said,” said Chairman Britt Blackwell, who voted for the refund. “It’s now happened twice, and I do see a momentum gaining.”

Councilman Michael Johnson didn’t agree when Council agreed to refund money a year ago to a homeowner in a similar situation, and he still doesn’t.

“We set a bad precedent,” he said. “That is general fund money. This is not coming out of some pot we put aside to hold aside for people who don’t bother to fill out their forms correctly.”

Still, others don’t see it that way.

“It’s not general fund money,” Councilman William “Bump” Roddey said. “It’s money (the homeowner) has paid. So let’s don’t get it twisted, because he has paid into, in excess of what would have been paid. So it’s his money to start with.”

Whose fault is it?

The state charges a 6 percent rate on all residences. However, homeowners may apply for a discounted 4 percent on primary residences. Typically real estate or closing agents inform homebuyers of the discount. The county also mails information to new homeowners about how to apply for the 4 percent rate.

Not everyone does.

“The situation is very unfortunate, although the county appears to have made no error,” said Edgar Hardin, county deputy assessor.

About 60 percent of York County’s tax base, or 65,000 homes, is charged 4 percent.

“What that shows is that 65,000 people got a piece of mail, filled out a piece of mail and submitted it,” Johnson said. “And because of that they got their tax (rate).”

If a homeowner pays the higher rate, state law allows a refund up to two years if proper paperwork shows it’s the homeowner’s primary residence. But if a resident wants refunds past two years, the request goes before Council.

“The limitation of two years is to protect all the other taxpayers,” said Councilman Chad Williams, who joined Johnson voting against the recent refund.

If a large number of taxpayers come back looking for money dating back a decade or more, council members say, it creates problems.

“For me, it’s all about protecting the other 250,000 taxpayers,” Williams said, adding he is more concerned about making the best decision than matching what Council did a year ago. “It’s easier to do it after one time than it is to do it after repeated times. And I think it’s important to get it right.”

Erin Ramey of Rock Hill last year asked for money back after saying she wasn’t aware she’d been paying the higher rate for 10 years. Council initially voted against refunding her, but later decided to refund two more years.

Glenn bought his home in 2007. The county says he was mailed a letter with instructions on Oct. 3, 2007. He didn’t apply for the 4 percent rate until Feb. 12, 2018. He was refunded two years of taxes in March. He appealed to Council, asking for a refund to 2008.

Roddey said the county didn’t do anything wrong, but it could do something right.

“I would like to have that opportunity to make it right,” he said.

Roddey said there are too many times council members have to tell residents if they could help, they would.

“Here’s a chance for us to say we can, and we will,” Roddey said.

Councilwoman Allison Love said talk of precedent and laws and financial implications complicates the issue.

“He has overpaid his taxes,” Love said. “The worst precedent that we could set would be to not refund someone their money that they’ve paid in.”

Love said it’s the “absolute right thing to do” paying back the money. She imagined a restaurant not giving back money if a customer paid too much. Or, she said, what would happen if someone didn’t pay enough in taxes.

“We’re all about going back and getting that,” Love said. “And we go all the way back, as many years as it would take. I feel like the man is deserving of his money, and I think it is almost embarrassing that York County would expect to keep someone’s money that was overpaid.”

The county only votes on part of the overpaid money. The Fort Mill school district has “the chunk of his cash,” Johnson said, since commercial properties and rentals at the 6 percent rate pay most of their tax in Fort Mill to schools. Johnson doesn’t expect the district would refund a decade of funding, and said York County shouldn’t either.

“I will be surprised if he ever gets that money out of them,” Johnson said. “We don’t have the authority to give him that money. All we can do is give him the county’s portion.”

Twice a trend?

Part of the reason Council first voted against a refund last year, and some members voted against it again this time, is out of concern more residents will do the same.

The 65,000 York County homes charged the 4 percent rate matches the total number of owner-occupied homes in the county, according to U.S. Census data, from 2016. In more than two years since, however, many new homes were added in Fort Mill, Tega Cay, Lake Wylie and other parts of the county.

Still, only two people so far have appealed past the two-year mark. It’s still more than neighboring counties see.

Archie Lucas, first elected to Chester County Council more than 30 years ago, can’t recall a similar case in his county.

“I’m getting up in age, and this is the first time I’ve heard of something like this,” he said. “That’s not been discussed, to my knowledge. Nothing has come before council on that.”

With his own business and at times owning non-primary residence properties, Lucas understands the difference between a 4 percent and 6 percent assessment. The higher rate applies to paying for schools and other services.

“Just go on and name it, it costs businesses more than residential,” Lucas said.

Lucas urges anyone buying a home or property to “check with our local government and see what the details are supposed to be.”

Lucas supports sticking with the law to provide refunds.

“If state law says two years, so be it,” he said.

In Lancaster County, the assessor’s office handles issues of homeowner tax refund requests almost daily, the office said. However, residents requesting more years from Lancaster County Council isn’t common.

“We have not had anybody do that,” said Councilman Brian Carnes. “I have had issues that have come with my constituents. They did not meet the criteria for the 4 percent.”

Carnes said it’s up to homeowners to get the discount.

“The way the law is written, it is on the particular homeowner to present the documentation they need to present to get the lower assessment,” he said. “The onus is on the homeowner.”

How to check

There are several ways to check which percentage rate your home is taxed. Call the York County Assessor’s Office at 684-8526, or visit maps2.yorkcountygov.com/ez/Search_Owner.aspx.

John Marks: jmarks@fortmilltimes.com; @JohnFMTimes

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