Committee reviews draft tax‑classification language to implement Act 73

Chair convened the Ways & Means Committee to take stock of outstanding Act 73 items and focused attention on proposed tax‑classification language that would restructure how non‑homestead properties are categorized and taxed. Legislative Council attorney Kirby Keaton presented the draft, saying listers and assessors would start reporting the number of dwellings on the grand list and property owners would complete a dwelling‑use attestation to declare how units are used.

Keaton described three new classifications in the draft: homestead, non‑homestead residential (for example second homes or short‑term rentals that do not meet the long‑term rental test), and non‑homestead non‑residential. He said long‑term rental would be defined by rental for at least 30 days and six months in a calendar year with a bona fide landlord–tenant relationship, and that mobile homes and bona‑fide employer housing would be handled explicitly. Keaton noted mixed‑use parcels would be classified proportionally based on finished floor space and that the draft leaves a definition of “finished” to Department of Taxes guidance.

Members asked how the Department of Taxes would verify attestations and whether the tax commissioner needs explicit statutory authority to determine whether a long‑term lease is bona fide. Keaton said the draft already contemplates enforcement by the commissioner, penalties for errors that benefit taxpayers, and appeals handled under existing valuation‑appeal processes. The draft also preserves contingency language from Act 73, including not setting tax‑rate multipliers now and a repeal clause if multipliers are not adopted by July 1, 2028.

Committee members warned of edge cases — for example large unfinished barns that could distort classification if treated as finished space — and asked for additional Department of Taxes guidance and data before rate decisions. The chair said the Department’s comprehensive report and forthcoming forms are key prerequisites for setting any new rates. The committee agreed to continue refining definitions, ask the Department for implementation guidance, and coordinate language with incoming House Education bill provisions.

The committee did not take a vote on the classification language; the presentation was framed as an informational walkthrough to identify technical gaps and next steps (guidance on “finished” space, enforcement authority, and data needs) before formal drafting and any rate‑setting decisions.