After the last few weeks, we may as well just rename this blog Maryland Politics Watch with Kathleen Miller. With the Examiner’s trouble-making reporter grabbing scoops left and right, how is an underpaid blogger supposed to compete? This time Ms. Miller’s target was MoCo’s wisecracking Bad Boy, House Majority Leader Kumar Barve (D-17).
The basic story in Ms. Miller’s article is that Barve and his wife, attorney Maureen Quinn, each purchased homes before they married and received principal residence designations on them from the State’s Department of Assessment and Taxation (SDAT). Principal residence status is important because it confers tax credits from the state and county. Barve and Quinn kept those designations after they married, earning credits on both properties.
The timing of the transactions is important. Ms. Quinn bought her home in Annapolis on 12/22/03. Barve bought his home in Gaithersburg on 8/4/04. The couple married in September 2004. Ever since, SDAT has applied principal residence status to both properties, triggering credits estimated by the Examiner at $5,844.88 on the Annapolis home and $3,575.13 on the Gaithersburg home.
The House Majority Leader (who is also the Chair of the House Revenues Subcommittee) provided this statement to us:
Before we got married, my wife and I bought homes and each of us filled out the form saying that the home was our primary residence – which was true. Everybody does this at settlement. We then got married and decided to keep both homes because we could afford both mortgages. We never changed the titles of the properties into joint names because the paperwork seemed unnecessary. If I died, she would get my property and vice versa. We occupy both homes (we live in Annapolis during session – thereby saving the taxpayers the cost of paying for a hotel room for me).
Three years later, our accountant said we would have to fill out a form to declare our Gaithersburg home as our primary residence so that we would get the Homestead credit for the property. We did this. Period.
There are some people who deliberately apply for the credit for investment properties illegally and we wrote the law with them in mind. The situation of a married couple not selling one home was not what we considered. If you recall, there was a news article last year about other legislators from both parties in this situation. Even when reading that article it never occurred to us that we might be in a similar situation.
Maureen and I have tried to be very diligent about NOT getting special treatment of any kind. And, we do whatever our accountant tells us to do.
Barve should fire his accountant. When I Googled “Maryland principal residence,” the very first search result was this SDAT regulation, which states in part:
In cases where spouses own two dwellings and claim each occupies one of the residences, the credit will be granted only on the one property used as the principal residence unless the couple is legally separated. There have been several court cases involving tax credits as well as Internal Revenue Service Regulations holding that the “notion of marriage” would be contravened to allow more than one residence.
In his statement, Barve references a law that was passed in 2007 by the General Assembly. That law, which Barve co-sponsored, was spurred by the work of tax activist Louis Wilen and was intended to crack down on landlords who illegally claimed principal residence status for properties they rented out. But the law’s requirement that citizens apply for renewals of their principal residence also ensnared many non-landlords, including several state legislators. In any case, the SDAT regulation prohibiting dual principal residence for married couples predates this law. The Examiner quoted an SDAT manager who said the prohibition “had been that way forever.”
Most of my informants declined to comment on this even on an anonymous basis. Two of them joked that Barve’s real problem is that his partner is of the opposite sex. One spy laughed, “Hey, if they had been an unmarried same-sex couple, this would all be legal!”
Kumar Barve has a lot going for him. He is whip-smart, wickedly funny, has a long institutional memory of the House as a fifth-term Delegate and holds a position of substantial influence. All of these things make him potentially a great asset for Montgomery County in Annapolis. But on the heels of his DUI guilty plea, he is now in the midst of his second negative story in a year. MoCo’s Bad Boy must stay out of more trouble. Can he do it?