Tlaib (John M. Galloway / Detroit News)
Lansing — A Democratic state representative from Detroit who helps her constituents prepare their income taxes acknowledged Monday she has been erroneously claiming a homestead tax exemption on a second home in Dearborn for about five years.
State Rep. Rashida Tlaib blamed a “broken” property tax system that allowed her and her husband to double-claim principal residences in both cities, lowering their annual tax bill on the rental house in Dearborn by 18 mills and shortchanging the Dearborn School District by about $350 annually.
Tlaib, who is running for the state Senate this year, said Monday she was working to quickly pay off the tax debt and any penalties.
“It’s kind of sad where we have a broken system where somebody can have two personal residences and nothing gets caught … and you can have two drivers’ licenses and they catch it,” said Tlaib, who vowed to sponsor legislation that would catch the problem for people with second homes. “If I wasn’t running for office, I’d have never caught it. ... This is a big mistake, and I’m going to address it.”
Tlaib said the double-counted exemption came to light because of “opposition research” conducted by an opponent in her 4th District state Senate campaign. A spokesman for her main Democratic primary opponent, state Sen. Virgil Smith of Detroit, declined to comment Monday on Tlaib’s tax issue.
Tlaib said her husband, Fayez, mistakenly claimed the homestead property exemption on the Dearborn house on Tireman Avenue when he combined the property with an adjacent vacant lot in 2008. Tlaib said they have a rental license from the city of Dearborn and were recently renting the home to her sister.
Based on the taxable value of their second home, the Tlaibs saved $356 in 2012, according to the state’s online property tax estimator.
Michigan allows homeowners to claim a principal residence exemption on one home, reducing their property tax bills by up to 18 mills, which help fund public schools.
“To me as a person who fights for school aid funding … there’s overwhelming guilt for not being able to catch something like that,” said Tlaib, minority vice chairwoman of the House Appropriations Committee.
Tlaib said she and her husband bought the Dearborn house in 2000 and lived there until 2008, when they moved back to Detroit. She said she was surprised the double exemption wasn’t flagged in past elections by other political opponents.
“The Dearborn house comes up every single election year,” Tlaib said. “It always comes up that ‘well, she doesn’t live in the city.’ ”
Officials in Dearborn could not be reached for comment Monday because offices were closed for the Presidents’ Day holiday.
As a state representative in the 6th District that covers parts of southwest Detroit, River Rouge and Ecorse, Tlaib has offered assistance in preparing income taxes each year to low-income and disabled residents. The free service has helped “over 1,500 families, bringing in over $2 million in refunds that refueled our local economy,” according to her Senate campaign website.
Tlaib, an attorney, said she uses a software program to assist people with preparing their tax forms, which are checked over by a professional.
Tlaib said she and her husband have a bookkeeper do her own taxes because of the complexity of their multiple incomes, mortgages and two homes.
Their bookkeeper didn’t catch that they were double-claiming the homestead exemption, she said.
“At the end of the day, I’m responsible, and I’m taking care of it,” Tlaib told The Detroit News.