Department of Revenue says Housing Authority residents are ineligible for Circuit Breaker rebate

It's tax time again and the issue of the Circuit Breaker tax rebate program has been causing concern among the residents of some of the public housing facilities in Nevada. The program is administered by the Missouri Department of Revenue under the Revised Statutes of Missouri, Chapter 135, Section 135.025 and is designed to provide a tax break to people who own or rent their homes and meet certain other eligibility guidelines.

The cause for concern is the fact that many housing authority offices around the state have been notified by the Department of Revenue that some of the residents might not be eligible for the tax relief. In a nutshell, the tax relief is intended to give back to renters that portion of their rent that a landlord would have used to pay the property taxes on the rental property.

Property taxes are a cost of doing business in the rental industry, just like insurance or repairs, and landlords pass that cost on to the consumer or renter just like any other business would pass on a similar cost of doing business.

Both properties and all the rental units contained in them which are under the auspices of the Housing Authority of the city of Nevada are exempt from property taxes because the Housing Authority gives the city an annual Payment in Lieu of Taxes Since the Housing Authority does not pay taxes, they do not pass that "cost of doing business" on to the consumer. That makes renters ineligible to receive the tax relief.

The fact that the Housing Authority does not pay property taxes has been confirmed in an-e-mail from Dale Gray, regional public affairs officer for the U.S. Department of Housing and Urban Development. In light of that, it should come as no surprise that Ted Farner, Director of Communications for the Missouri Department of Revenue said, "If people know that there's no property tax paid on the property, they shouldn't file."

To further address the concerns of residents, the Housing Authority of the City of Nevada has issued the following statement. A copy of Chapter 135, Section 135.025 of the Revised Statutes of Missouri is also included.

"As Executive Director of the Housing Authority of the City of Nevada, Mo. I would like to provide a response to the numerous inquiries that our agency has been receiving regarding RSMO Chapter 135, Tax Relief, Section 135.025.

"On Dec. 31, 2009, our office was contacted by a representative of the Mo. Dept. of Revenue office in Joplin, Mo. regarding the property tax credit qualification. The representative informed me that individuals were not eligible for that property tax credit if they rent from a facility that does not pay property taxes and she was contacting the public housing agencies in her region. The Housing Authority of the City of Nevada, Mo. pays an annual Payment In Lieu of Taxes (PILOT) to the City of Nevada and therefore, does not pay property taxes.

"She asked if we could help inform our residents and I offered to include a statement in our monthly newsletter if her office would like to provide such a document.

"At the request of the Mo. Dept. of Revenue, Joplin office representative, and to help keep our residents well informed of matters which may impact them, a copy of the document prepared by that office was included in our January newsletter."

-- Carol Branham, Executive Director Housing Authority of the City of Nevada, Mo.

Accrued taxes and rent constituting taxes to be totaled -- maximum amount allowable --allocation regulations, when.

"135.025. The property taxes accrued and rent constituting property taxes accrued on each return shall be totaled. This total, up to seven hundred fifty dollars in rent constituting property taxes actually paid or eleven hundred dollars in actual property tax paid, shall be used in determining the property tax credit. The director of revenue shall prescribe regulations providing for allocations where part of a claimant's homestead is rented to another or used for nondwelling purposes or where a homestead is owned or rented or used as a dwelling for part of a year."