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The Altoona Redevelopment Authority/Land Bank plans to develop a strategy to deal with obtaining tax exemptions for the properties it owns.
It's an issue because Blair County doesn't automatically grant property owners tax exemptions without those owners going through the county's formal tax appeal process -- including government agencies -- despite those being generally entitled to exemptions, officials said at an RA/LB meeting.
The issue came to the attention of the city's Community Development Director Diana White in connection with properties the RA/LB acquired last year, when they appeared on the tax rolls, with tax bills attached, White said.
"I thought it was odd," given that the agencies are clearly entitled to exemptions, White said.
It's not an immediate problem, because the properties are worth so little that the tax bills were less than a dollar apiece, White said.
But as the RA/LB begins following through on its plan to develop vacant lots and rehabilitate blighted homes, some properties will have much higher values, and thus higher tax bills that the city doesn't want to pay unnecessarily, White said.
"I have a history with this issue," said the agencies' new solicitor Patrick Fanelli. "Unfortunately, none of the history is good."
It's standard procedure for counties to require government agencies and nonprofit organizations to apply for exemptions in order to obtain appeals, even though they're generally entitled to those exemptions, Fanelli said.
One option for the city agencies is to accept the situation and develop a policy to ensure that appeals are filed on time, Fanelli said.
That will ensure the agencies won't need to pay any tax on properties they obtain before the August filing deadline that applies to the following year's taxes, because the current year's taxes on those properties are paid at the time of purchase, he said.
For properties that the agencies buy after the August deadline, however, taxes will be owed for the following year, he said.
The agencies might be able to avoid having to pay those taxes by asking the three taxing bodies -- the county itself, the municipality where the property is located and the school district -- to exonerate them for a year, until the agencies can get an exemption by appeal, Fanelli said.
But that tactic isn't certain to work, and it's somewhat cumbersome, he said.
Still, it worked for a nonprofit client of his, he said.
Board member and Altoona Mayor Matt Pacifico suggested the city could also seek to eliminate the problem altogether, potentially by asking local lawmakers to propose a legislative fix that would require counties to grant exemptions automatically, when government agencies are entitled to them.
The presumption that government agencies are entitled to property tax exemptions isn't absolute, however, Fanelli said.
The state's land bank law outlines one exception, for example -- requiring payment of taxes starting in the fifth year in which a property has been continuously leased to a private third party.
County assessment office staff actually lack the authority to grant exemptions, said chief county assessor DeAnna Heichel.
All exemption requests must go before the Board of Assessment Appeals, Heichel said.
One of the reasons for requiring that all appeals go before the board is the existence of exceptions like the one in the land bank law, she said.
Mirror Staff Writer William Kibler is at 814-949-7038.