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home : news : news February 26, 2015

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8/13/2014 6:00:00 AM
State Supreme Court won't reconsider Section 42 ruling

JACKSON - The Mississippi Supreme Court has declined to reconsider a ruling that Humphreys County used the wrong method to determine property taxes on so-called Section 42 housing for low-income residents.

The justices in the October 2013 decision ordered Humphreys County to reimburse taxes collected since 2006.

The ruling applied statewide.

More than a dozen other counties, the Department of Revenue and the Mississippi Association of Supervisors jointly asked the Supreme Court to revisit the case.

The court denied the motion Thursday.

Thirteen other counties affected by the order have been identified as DeSoto, Forrest, Grenada, Hancock, Harrison, Jackson, Lauderdale, Lowndes, Madison, Pike, Pontotoc, Rankin and Sunflower.

At issue was whether the federal tax credits developers receive should be included when tax assessors calculate the developments' property taxes.

Developers have long contended that since the U.S. Department of Housing and Urban Development caps the rent based on median income, the credits should be exempt.

The Department of Revenue has countered that state law requires they be included.

The Mississippi Association of Supervisors has said exempting the credits lowers the taxes owed by the developments, which hurts the poorer counties in which they're most commonly located.

"Obviously we're not happy with it," Leslie Scott, attorney for the supervisors association, told The Clarion-Ledger

Legislation enacted in 2005 prescribes the method by which tax collectors can calculate the liability for the Section 42 developments.

Humphreys County had unsuccessfully argued that the Revenue Department's tax method was not authorized anywhere in the 2005 law and that it had the right to tax Section 42 property as it wished.

The county also argued that the Legislature never intended for the income method to be the only way to assess the value of affordable housing.

The Supreme Court unanimously found the credits are exempt and ordered counties that have over-collected to issue refunds.

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