A taxpayer asked: Why must taxpayers file annual returns for some ...

When the legislature adopts a new law, it?s not always clear what the underlying intent might have been. So, sometimes there may be different requirements which do not match common sense.

We think there is common sense behind the following which relates to some exemptions. Homestead exemptions require an initial application and documentation. The documentation may include a copy of a deed ? which also can be researched?and verified by the Property Appraiser in the official records kept by the Clerks. Once homestead is established, unless the taxpayer moves or status changes, there really is no need for an annual application, BUT a change in status is important to be sure?a continuation of homesteads comply with the governing laws.

At least in the jurisdictions where we?ve had a homestead, the Property Appraiser sends out a postcard once a year asking for information IF anything has changed.?State standards require the taxpayer to be truthful or else there are penalties. And, because the Property Appraiser?typically receives updates on new deeds, it?s possible to check?changes in ownerships as well as new applications for homesteads.??So, the Property Appraiser has several?means to verify the lawfulness of homestead exemptions. An annual renewal of applications would not add anything.

Yet, when it comes to other exemptions, such as the one for retired persons who may seek additional tax relief, there is a annual application or renewal requirement. Here?s where common sense comes up. There are income requirements that apply to this exemption, and income changes. One year, someone may have more or less revenue, and their tax returns to the IRS would reflect changes in expenses too. And, local governmental officials in Florida have no internal means of cross-checking, because Florida does not have a personal income tax, so it makes common sense to require taxpayers who need the additional exemption to request it each year.

The same annual application requirement applies to agricultural exemptions. Basically the data provided with applications would reflect whether someone is still in business.

Another example of an exemption that requires on an initial application, plus annual reporting if there is a change in status relates to widows or widowers. If someone remarries, that would mean the exemption would no longer apply, so you would report that new status.

There usually is a reason for everything in the property tax scheme. You just have to think it through ? which is what happened during the conversation with the taxpayer who asked why there were different reporting requirements. As soon as he considered documenting changes in status, he understood immediately.

Source: http://commercialpropertyservices.co/blog/?p=309

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