Audits of two types of taxes will help determine whether Allen County property owners are paying their fair share – and may even provide more money for local governments in the process.
The County Commissioners Thursday hired South Carolina-based Tax Management Associates to conduct audits of both business personal property and records used to determine the homestead credit – the largest single deduction available to homeowners.
About 95,000 of the county's 110,000 homeowners now claim their properties as their primary residence, qualifying them for a credit that lowers their tax bill by about 50 percent, according to Auditor Tera Klutz. Although officials often scour local records to prevent owners from claiming the homestead credit on multiple properties, the consulting firm will be able to review a nationwide database.
“That will help make sure people are paying their fair share,” Klutz said.
Although owners found to have intentionally claimed more than one homestead credit could be subject to a fine, Klutz said she would make allowances where justified, such as someone who has moved to an apartment in another city seeking a job but still claims the credit on a property in Fort Wayne.
County Assessor Stacey O'Day, meanwhile, will be working with the firm on an audit of business equipment and other personal property. Companies have generally self-reported their assessments in the past, but O'Day said the consultant will conduct on-site property audits, review tax forms and train county employees to more effectively collect and audit the taxes in the future.
“This might uncover some unusual things,” Commissioner Linda Bloom said.
More-accurate assessment and collection of taxes would do more than promote fairness, Klutz noted. Elimination of unjustified homestead credits would also increase assessed value, which could also allow governments to collect more taxes. Under state law, property taxes are capped at 1 percent of a home's assessed value. But if that value goes up, so does the maximum payable tax.
The firm will be paid according to the amount of taxes and payments identified by its services.