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County considers firms to track tax cheats
By Jackie R. Broach
Georgetown County property owners getting a lower rate on their taxes by claiming a homestead exemption they aren’t entitled to or declaring a vacation home as a primary residence may soon find the jig is up.
The county is seeking bids from companies interested in conducting a county-wide “property tax legal residency compliance audit” to uncover billing errors and cheating by residential property taxpayers.
County Administrator Sel Hemingway said he doesn’t expect an audit will turn up much, but the company that originally approached him about an audit indicated improperly applied exemptions are more prevalent in coastal areas, where vacation homes make up a larger share of the tax base.
“I don’t think it’s a big problem or a big number,” Hemingway said. “We’re just taking the position that whatever number it is, we would be uncovering tax dollars that should be paid and lessening the burden for other taxpayers.”
Vacation homes are assessed at 6 percent of their market value. The tax rate for owner-occupied homes is 4 percent and they are exempt from taxes that pay for school operations.
If the county commissions an audit, the company would be paid a percentage fee based on the difference between back taxes recorded as paid and the corrected tax assessment. Back taxes, penalties, interest and any other associated fees levied by the county as a result of the findings would not be considered in the company’s fee.
There also would be no future fees to the vendor.
The low bid will be presented to County Council and Hemingway said he expects they will be receptive.
Council Members Jerry Oakley and Bob Anderson, who represent the Waccamaw Neck, already see merit in the idea.
“I think ensuring compliance is a matter of fairness to everyone and is obviously of legitimate concern to council,” Oakley said.
Based on what he knows about the issue, he said he would support an audit and expects widespread support for one based on what he has heard from constituents.
Anderson said he sees it as a responsible move for council and isn’t sympathetic to those who might not like council looking too closely at compliance.
“If you’ve got an ordinance or a law, you follow it. You can’t just follow the ones you want to follow,” he said.
John DeLoache, an attorney with the S.C. Association of Counties said it’s up to counties to determine what audits they perform, but it is important for counties to make sure people are compliant with the law.
If an audit takes place, the contracted company would take the county’s tax records and use a computer program and a national database to filter the data. The process would pinpoint people who are “double dipping” by claiming primary residences in two places or who might be paying property taxes under the name of someone who has died to keep receiving a homestead exemption.
The county will look into potential violations found by the company to see if abuse occurred and make appropriate adjustments.
“It seems like a reasonable thing to do,” Pawleys Island Mayor Bill Otis said of the audit.
Kevin Corrigan, president of the Litchfield Beaches Property Owners Association, agrees.
“I think it’s a great idea. If the county thinks they’re missing out on revenue and has a professional, proven firm that can help them collect it, I’m all for it.”
If the county decides to commission an audit, that will join a variety of other methods the county uses to find missed tax dollars.
On Wednesday, the first day of school in Georgetown County, a field appraiser from the auditor’s office started the morning at Waccamaw Intermediate School, looking for vehicles with out-of-state tags, then moved on to other schools to do the same.
It’s an annual practice that helps the county locate residents who haven’t registered their vehicles, said Auditor Linda Mock.
“We do that throughout the year, as well,” she said.
While she doesn’t want to reveal all her secrets, she said there are a number of visual ways to find violators, and the public often helps by providing tips.
The Auditor’s page on the county website includes a place where people can anonymously report residents with out-of-state license plates.
In the last budget year, Mock’s office had contact with 135 vehicle owners with out-of-state tags, representing more than $16,000 in revenue, Mock said. Total vehicle revenue was $5.2 million.
“We certainly like to do everything we can to make sure everybody is compliant with the law and we are servicing them appropriately,” Mock said.