Tax assessors: $10 million developments may pay $0 property tax

HANCOCK COUNTY, MS (WLOX) - Coast tax assessors said it's a law that is unfair to anybody who pays property taxes in this state. Last week, the Mississippi Supreme Court shot down the method counties have been using to tax affordable housing complexes. Many of these properties were built after Hurricane Katrina. Now, local tax assessors fear that housing developers who already have received millions in federal tax credits will pay nothing in property taxes.

The apartment complexes were built with federal tax credits to offset developers' expenses and keep rents lower for tenants.

"These developments are very good properties," said Hancock County Tax Assessor and Collector Jimmie Ladner. "They're well maintained. They're attractive. They afford a lot of amenities for folks. So, this has never been an issue about the type of property that they bring in or the type person that lives in those properties."

However, ad valorem tax has been an issue. The State Supreme Court said counties can't continue to factor in the amount of a tax credit when sending owners their property tax bills.

"If you're building a $100,000 house and somebody gives you $50,000 toward building that house, you don't have a $50,000 house when you're finished," said  Ladner.

In Hancock County, the ruling means a $100,000 loss in tax revenue per year. In Harrison County, where there are 28 tax credit properties, Tax Assessor Tal Flurry said if tax credits had not been factored over the last four years the county, cities, and school district would not have been owed $4.5 million.

"There's no such thing as an exemption," Flurry said. "Somebody has to pay the taxes for the cities, the counties and the schools to function. And if one property owner doesn't pay his fair share, the other property owners will have to pick that burden up."

County officials said it's up to state lawmakers to right this wrong and be fair to everyone.

"We have been told for years, since this law was enacted in 2005, the legislature can't touch this because there is pending litigation," Ladner said. "Well, the litigation is not pending anymore. As of last Thursday, it's over. So I would call on the state legislature. I would call on every property owner in this state to talk to their legislators to correct this problem."

"The way the law reads now it's possible and it's happening that some of these $10 million and $15 million properties are going to be on the roll for zero taxes," said Flurry. "I believe in everyone's eye that's not the correct way to value these properties. They have to have some value or nobody would build them, and we certainly have a lot of them down here right now."

Although the suit that went before the state supreme court was out of Humphreys County, Hancock and Harrison County officials said similar tax lawsuits were filed there, as well, by affordable housing developers.

Ladner said the most detrimental impact of the ruling would be to the Bay-Waveland School District.

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