Committee backs retroactive fix to include trusts in primary residence credit

The House Appropriations Committee voted to give a do-pass recommendation on Senate Bill 2201 after Senator Mark Weber (Senate, District 22) said the bill corrects an oversight that excluded trusts from the primary residence credit and applies retroactively for the taxable years covered.

The bill, as presented by Senator Mark Weber, would add trusts to the definition of qualifying ownership for the primary residence credit and contains both a retroactive clause and an emergency clause intended to speed implementation. Weber told the committee that "we learned from the, tax department that there are approximately 2,500 applications were denied because of those that were, owning their homes, in trust," and that the tax commissioner estimated the number could reach about 4,000 once tax preparers were informed.

Committee members asked clarifying questions about related ownership forms. Representative Louser noted some constituents reported life estates rather than trusts; Weber said life estates are included in the amendment ("Life estates is included"). Representative Nelson and others emphasized that the underlying program is intended to apply only to primary residences and that out-of-state ownership without residency should remain excluded.

Representative Swiatek moved a do-pass recommendation on Senate Bill 2201; Representative O'Brien seconded the motion. The committee proceeded to a roll-call recommendation; the chair announced the motion carried and the bill will be carried to the floor by Representative O'Brien.

Why it matters: The amendment would make people who hold qualifying homes in trust (or in life estates, where included) eligible for a credit they were denied after the original biennial statute went into effect. The bill includes retroactive application so previously denied applicants can reapply, and an emergency clause intended to accelerate implementation once the governor signs the bill.

Implementation details and open items: Senator Weber said the tax department has identified prior applicants who were denied and that department communications to tax preparers contributed to fewer applications; he and committee members said the tax department is expected to notify affected filers after the bill is enacted. Committee members also noted that the bill does not change the program's requirement that the dwelling be a primary residence; the application process remains an opt-in process, because the tax office does not currently have systems to track residency changes automatically.