Filing tax return to get exemption not a large burden
In previous editions various Hawaii County Council members and readers have spoken out either for or against requiring the filing of a state tax return in order to qualify for the property tax exemption. The main argument against it seems to be a feeling an undue burden and cost will be placed on lower income individuals. Instead of arguing against filing a state return, it should be promoted especially for those with a lower income. The reason is the state tax code provides a refundable food/general excise tax credit of up to $85 per person in the household even if no state tax has been paid or withheld.
The argument of excessive cost to file the return is negated by the volunteer groups that provide free services to seniors and low income groups. The IRS sponsors the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs that provide free tax preparation for low income and seniors at numerous sites around Hawaii County. As a volunteer for the AARP-TCE program, we routinely prepare many state returns for individuals who have no requirement to file, but file simply to receive the GET refund credit.
As with any government program where money is involved in the form of refunds, credits, or exemptions there will be fraud associated with it. Requiring the filing of a Hawaii state income tax return to qualify for the home exemption would help weed out those who are not residents but still claim the exemption. It would also help take the deceased off the exemption lists. To take it a step further, requiring a GET filing in order to qualify for the agricultural land exemption would also help, but that’s another topic altogether.