By Abigail W. Adams
Mike Rogers, from the Maine Revenue Services Property Tax Division, speaks to an overflow crowd in Whitefield about the state mandated personal property
tax May 12. (Abigail Adams photo)
It was standing room only at Whitefield’s central fire station Tuesday, May 12 with over 50 residents crowding in to attend an informational session held by the board of
selectmen about a personal property tax survey recently sent to every Whitefield household.
Residents expressed confusion and anger over the survey, which was sent out to update Whitefield’s personal property tax list, and may cause an unexpected tax bill
for many in the town.
The official deadline for residents to complete and return the survey was May 31. The questionnaire asked for a detailed list of all equipment, machinery, furniture,
fixtures, or electronics used to support a business or farm, much of which could be taxable.
Many small business owners in attendance said they were caught by surprise by the personal property tax, which has only been sporadically enforced in Whitefield. The
tax has the potential to break their already struggling farms and businesses, many said.
Selectmen moved the deadline for completing the survey to July 1, due to the objections of many residents and the ambiguity surrounding the personal property subject
to the tax.
While collection of personal property tax is a state mandated law, municipalities have a great deal of discretion in determining how to apply it, and deciding what
property to tax. Selectmen sent out the survey, but developed no local guidelines for the tax, which, according to state law, is not limited to businesses and could include just
“You’re talking straight to us, but at an angle,” resident Melissa Thornton said to selectmen. “We need a clear definition. Don’t ask us to waste our time [filling
out the survey] until you make a decision.”
Selectmen took names at the end of the meeting to form a citizen’s committee to develop guidelines for applying the tax in Whitefield.
Maine Revenue Services Property Tax Division representative Mike Rogers explained the obtuse legislation governing the collection of personal property tax to the
irate crowd, which is not limited to businesses or farms, according to the state.
If municipalities refuse to collect the mandated tax, they may face a reduction in state funding for schools and in revenue sharing, Rogers said.
Whitefield has historically collected personal property tax. According to statistics compiled by resident Dan Joslyn, 52 percent of households paid personal property
tax in 1968. That percentage dropped to 7 percent in 1987 and was only 1 percent in 2011.
“It’s existed for a long time but been ignored,” Joslyn said after the meeting. “They [selectmen] are attempting to rectify this, but what they’re proposing is to
put additional taxes on people already struggling, without warning.”
There were 19 individuals and companies taxed for personal property in 2014. The tax generated $112,786.74 in revenue for the town, according to the town report,
with the largest amounts paid by Time Warner Cable and Maritimes & Northeast Pipeline.
CMP transmission lines were previously included on the personal property tax list, but were switched to real estate following the revaluation that dropped
Whitefield’s mil rate by a full percentage point.
Selectmen’s only recourse to collect unpaid personal property tax is small claims court, Rogers said. According to the town report, there is currently $7,179.66 in
unpaid personal property tax.
Discussions about updating the personal property tax list on the board of selectmen date back to March. The survey was sent out at the request of Whitefield’s tax
assessor Tom Hayes. Many selectmen expressed reservations about the survey during preliminary discussions.
Selectman Lester Sheaffer told the crowd May 12 the decision to send out the survey was not unanimous, and that he was still opposed to it.
Selectman Tony Marple expressed reservation about the personal property tax survey during preliminary discussions and checked in with neighboring municipalities
about their policies regarding the tax – some ignored it, some placed thresholds on the value of equipment business owners were required to claim.
With little fanfare, selectmen announced they were going to send the survey to business owners at the beginning of the annual town meeting in March – it was sent to
approximately 100 suspected businesses shortly afterwards.
Due to confusion generated by the initial survey, and claims of unfairness because some business owners received the survey and some did not, the survey was recently
sent out again to every household.
Marple explained the reasoning behind the decision to update the personal property tax list. “It’s the only fair thing to do,” Marple said to the crowd. According to
selectmen, it is unfair for the town to collect the tax from some businesses, but not others, and the additional revenue stream from the tax has the potential to reduce the mil
rate for the entire town.
Rogers said through the Business Equipment Tax Exemption, BETE, program and the Business Equipment Tax Reimbursement, BETR, form, much of the personal property tax
paid by business owners could be refunded through the state. The personal property tax will generate additional revenue for the town and much of it could be returned to business
owners through the state’s tax exempt programs, selectmen said.
Both programs require a large amount of paperwork and a complicated procedure to receive the refund. Refunds through the BETR program are not received until the
following year. The Legislature is currently considering combining the two programs, which would change how they are administered, Rogers said.
While the personal property tax is not limited to businesses according to state law, selectmen have no intention of applying the tax to anyone other than businesses,
“The way this has been rolled out has been botched,” a resident said. “You guys are being so cavalier about it and saying it’s only a small amount, but a lot of our
businesses have a very small profit margin. If you’re going to implement this you could at least have given us time and let us know it was coming down the pike.”
Whitefield is home to a variety of livestock, dairy, and crop farms, manufacturing companies, home businesses, and small start-ups. Approximately $500,000 of
equipment is required to run a diary farm, Mike Moody, a dairy farmer in attendance, said. Moody said he would be forced out of business if he was required to pay a tax on the
Due to the personal property tax, Steve Dumas is considering pulling out of the planned restaurant at the ice cream stand on Route 17, landlord Stephen Smith said.
Due to the ambiguity of the state law, and lacking clear guidelines on how to apply it in Whitefield, selectmen were unable to answer many of the questions raised by
Selectmen said they hope to continue to engage the community and collect input as decisions regarding the unanswered questions are made.
“No one is going to send in the survey until you guys figure this out,” Thornton said.