The Montana Legislature last month passed rebates of up to $400 for homeowners, so where’s the money?
It’s still in Helena, and that’s where it’s going to stay for at least three more months.
Lawmakers passed the rebates, intended for primary residences only, as one of the ways it planned to spend down the state’s revenue surplus, expected to exceed $1 billion by the end of the fiscal year.
Now homeowners will have to apply for their rebates, because the Department of Revenue has no way of knowing which properties are owner-occupied dwellings.
The rule is you have to have owned, paid taxes on and lived in the property for at least seven months in 2006. Summer cabins and rentals don’t qualify, and just one rebate will go to a household, so if two or more people own the house, it still only gets $400.
DOR plans to mail applications to property owners later this summer, and forms will be available at courthouses, libraries and online at www.mt.gov.
Owners will have until the end of the year to apply, but the department will start processing applications Sept. 1. Officials say the fastest way to get a rebate will be to apply online.
According to the agency’s Web site, “The refund is not considered to be taxable income if you used the ‘standard deduction’ for the 2006 tax year.”
Some critics of the system are honked off that the rebates aretaxable for folks who reported property taxes as an itemized deduction in the 2006 tax year — just as they’d report as income any tax refund they got on that year’s taxes.
That is fair, and it is not — as some of those critics claim — double taxation.
People who itemize get a break on their income taxes based on paying the property tax. Now that they’re getting some of that property tax money back, they will get a little less of a break on the income taxes.
The program is a good one; if cash keeps flowing into state coffers, we can expect more rebates in the future.
