More than 600 Neshoba County property owners could see an increase in their ad valorem taxes after the state Department of Revenue found cases where they don't qualify for homestead exemption.
In most cases, the exemptions were formerly granted to a deceased elderly relative, Neshoba County Tax Assessor-Collector Mike Lewis told supervisors on Monday.
The Department of Revenue's new computer software found mistakes in 36,000 homestead exemption filings statewide.
Lewis said he had attempted to notify the affected property owners here by mail or telephone.
"We had nine pages of names with 72 names to a page in Neshoba County," Lewis said. "They can refile between Jan. 1 and March 31."
Lewis recalled one Neshoba case where a mother over the age of 65 died seven or eight years ago and the daughter assumed the loan on the house and moved in.
"The daughter never filed for homestead in her name," Lewis said.
Some of the cases in Neshoba County involved incorrect Social Security numbers being keyed into the computer system.
"We had a few of those that are legitimate," he said.
All Neshoba County property owners should receive their tax bills later this month, Lewis said.
The bills reflect taxes due from Jan. 1, 2012, through Dec. 31, 2012.
Property owners have until Feb. 1, 2013, to pay their 2012 taxes without penalties or fines.
The Department of Revenue's new software found cases statewide where people were paying too little, too much or - in most instances - enjoying the tax break a deceased elderly or disabled relative formerly received.
Nearby Winston County had 1,814 cases; Kemper, 276; Lauderdale, 760; Leake, 476; and Newton, 284.
Under homestead exemption, the state encourages people to own homes by exempting the houses from some property taxes.
Residents must file a new exemption application if they experience changes like death, marriage or divorce, reach age 65 or become 100 percent disabled, among others.
The state reimburses counties and cities for lost tax revenues from homestead exemption. Those reimbursements, local officials say, have not kept pace with actual losses experienced by cities and counties.
Most of those re-flagged involved relatives of deceased elderly or disabled residents who, after their family members' death, lived in their house but didn't refile for the homestead exemption they actually qualified for.
County tax assessor offices are using the lists to correct their records and notify those who need to refile.
"Some were just typos on the applications, things that had to be cleaned up to correct," said Department of Revenue spokesperson Kathy Waterbury said. "But the biggest things we were seeing were the deaths. We were able to get information and run it against the entire system of Social Security administration death rolls."
Mississippi taxpayers who qualify receive up to a $300 credit against the ad valorem taxes due on their homestead, or real property.
The homestead credit is graduated and based on the assessed value of the property. The credit maxes out at $300 for assessed value of $7,500.
Those 65 or older, or 100 percent disabled, are exempt from tax on the first $75,000 of the true value of their home.
Property is assessed at a percentage of its true value. Owner-occupied residential homes are assessed at 10 percent; any other property is 15 percent. The true value of the property is multiplied by the assessment ratio to determine the assessed value.
The assessed value is multiplied by the local millage rate to determine the property taxes owed.
Those convicted of failing to notify the tax assessor's office of a change in their homestead status face a fine of up to $5,000, up to two years in prison, or both.
Waterbury said the state isn't looking to charge those red-flagged. And there will be no retroactive payment of taxes on incorrect homestead exemptions, she said.
"There might be some situations that are criminal, but on most of these, people just didn't know any better, and it catches up with them," she said.