Despite maintaining residency in their home states, a handful of House lawmakers appear to be improperly receiving the Washington, D.C., homestead tax deduction, reducing their annual property tax bills by hundreds of dollars and potentially much more over the long term.
A Roll Call review of District of Columbia tax records revealed at least four Members who receive the property tax benefit from among more than 80 lawmakers who own homes in neighborhoods that popular with lawmakers, including Capitol Hill.
Among those currently receiving the deduction are Rep. Tom Petri (R-Wis.) and his wife, who own a four-bedroom home in Georgetown, with an assessed value of more than $2.9 million, according to 2009 tax records.
Under the District’s homestead program, taxpayers who own a home in the city and use it as their principal residence receive a reduction of $67,500 on the assessed value of their home, or a savings of $573.75 off their 2009 tax bill.
More significantly, properties that qualify for the homestead deduction are also protected from considerable jumps in assessed value. The District caps those increases at 10 percent above the previous year’s tax assessment.
Public records show Petri’s home assessed at $1.4 million in 2009, less than half of its total value. (Estimates for the 2010 tax year predict the home will drop to $2.7 million in total value, with an assessed value of about $1.5 million.)
A spokesman for the Wisconsin lawmaker said Petri legally receives the tax benefit through his spouse, noting that although tax records list only “T.E. Petri” on the property, it is co-owned by Petri’s wife, Anne Neal.
“She pays income taxes here, and she was the one who signed” the form requesting the deduction, Petri spokesman Niel Wright said.
Neal serves as president of the American Council of Trustees and Alumni, a D.C.-based nonprofit founded “to ensure responsible management of higher education resources, end grade inflation, establish a solid core curriculum, and restore intellectual diversity on campus,” according to its Web site.
“The city is charging both of them with property tax, so the city regards her as a co-owner,” Wright said.
Under D.C. property tax laws, spouses of Members are eligible to claim the homestead deduction, even if the property is co-owned by the lawmaker.
“Although the general rule in the District is that spouses have the same domicile, it is possible for a spouse of a Member of Congress to be domiciled in the District (as established by objective factors) for homestead deduction purposes,” states a September 2007 memorandum issued by the D.C. Office of Tax and Revenue to clarify eligibility requirements for the homestead program.
But the memorandum adds that even if a spouse “works in the District, pays District income taxes, and has a District driver’s license” — all factors for establishing residency — those considerations are void if a spouse does not register to vote in the city.
“[T]he spouse cannot be domiciled here if he or she votes in the Member’s home state,” states the memorandum, which includes seven examples dedicated to questions about whether Members and their staffs and respective families may qualify for the program.
Neal, who is also known as Dede Petri, is not registered to vote in the District, according to the D.C. Board of Elections and Ethics, but is registered as Anne Petri in Fond du Lac, Wis. — most recently voting in a February 2009 primary — according to the Wisconsin Government Accountability Board Elections Division.
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