Silicon Valley Schools Make it Difficult for Seniors to Claim Parcel Tax Exemptions
After evaluating 22 school districts that levy parcel taxes with exemptions for seniors and disabled property owners, the Santa Clara County Grand Jury found major inconsistencies exist among school districts and reported that complex application requirements make it very difficult for taxpayers to claim an exemption.
However, the grand jury found that there was no intentional attempt to prevent taxpayers from claiming an exemption.
School districts are not required to offer exemptions for their parcel taxes, but many do, for certain types of property owners. The most common exemptions are for properties owned and occupied as a principal residence by taxpayers age 65 or older, taxpayers who are disabled, taxpayers who receive Supplemental Security Income or State Disability Income, and taxpayers whose household income is below federal poverty standards.
(CalTax: The Internal Revenue Service has advised taxpayers that parcel taxes may be deducted from federal income taxes, but only if the tax is imposed at a “like rate against all real property.” Some questions remain as to whether an exemption violates this uniformity requirement. Exemptions often are touted to older voters in the political campaigns urging them to approve parcel taxes.)
Under a new state law supported by CalTax (AB 1891, Dababneh, Chapter 450 of the Statutes of 2016), any exemption that is granted must remain in effect until the taxpayer becomes ineligible, and would allow a new exemption to be granted in the same manner if the taxpayer becomes ineligible for the exemption for any reason.
The grand jury examined the availability of exemption applications, eligibility rules and the application process, as well as each district’s exemption renewal process.
Among the grand jury’s findings:
- Of the 22 districts that allow exemptions, 21 provide information about the exemption application process on their websites, although the information can be difficult to find.
- One website doesn’t refer to the parcel tax, and requires the use of the search function to find the information.
- One website provides no direct information about exemptions, the exemption process, or online forms.
- Seven of the 20 remaining districts provide a link on their homepage to information about the parcel tax that leads the searcher to information on exemption application procedures.
- Three of the seven use the words “parcel tax” on clickable links on their homepages, making it simple for taxpayers to find information, including exemption application instructions.
- Four of the seven refer to the parcel tax by its ballot name (for example, “Measure A”). Taxpayers may not remember what “Measure A” means, the grand jury noted.
- Fourteen districts provide website information about the exemption through links under a homepage heading, such as “Community” or “Explore the District.” The most common heading is “Departments,” which requires searchers to know that the Business Services Department usually administers parcel taxes. Once the correct department is found, taxpayers may have to click many times to arrive at the relevant information.
- Four districts indicate on their websites that they provide refunds of tax payments for those eligible for exemptions who miss the application deadline. Other districts indicated that they may provide refunds either upon request or on a case-by-case basis.
- Applications for exemptions generally consist of a simple one-page form plus requirements for verification documentation. In some cases, disability applications were unclear as to which type of disability (SSI with disability and/or SSDI) qualifies for an exemption.
- Four school districts require in-person applications for parcel tax exemptions.
- Four school districts request in-person applications, but instruct taxpayers to call for alternate arrangements if they can’t apply in person.
- 13 school districts allow taxpayers to apply by mail for the exemptions.
Renewing an Exemption
- Two districts allow for automatic renewal of exemptions. Once granted an exemption, the taxpayer need not verify continued eligibility. One district annually sends a notice to homeowners with exemptions, and only those who wish to terminate the exemption need reply.
- Eight districts mail a renewal verification form annually that the taxpayer must return by a designated deadline.
- Six districts require annual renewal of exemptions; however, they provide no information about the process.
- Four districts do not have any information about the annual renewal process.
About the Property Tax Bill
- Unlike the printed property tax bills in the other eight Bay Area counties (Marin, San Francisco, San Mateo, Alameda, Contra Costa, Napa, Solano and Sonoma), the bill in Santa Clara County does not include telephone numbers for the taxing agencies, or other contact information that a taxpayer could use to inquire about exemptions.
- The absence of taxing agency telephone numbers or other contact information on the tax bill prompts calls to the offices of the tax collector and controller, because their telephone numbers do appear on the bill. Staff in these offices try to refer the caller to the appropriate person at the taxing agency. Sometimes this means putting the caller on hold while attempting to contact the taxing agency directly. Shunting callers from one office to another frustrates taxpayers and wastes the time of county staff.
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