Can an Arkansas property owner claim the Arkansas homestead property tax credit and also claim a homestead-style credit in another state in the same year?

Plain-English summary

State Representative Micah Neal asked the Arkansas AG a snowbird-style question: can a person own homes in two states, claim a homestead-style property tax credit on the out-of-state home, and also claim the Arkansas homestead property tax credit on an Arkansas property in the same year? And if not, is a county assessor in Arkansas required to check for out-of-state credits before granting one?

AG Leslie Rutledge concluded that Arkansas law itself does not categorically prohibit claiming both credits. The phrase "homestead property tax credit" in the Arkansas implementing legislation refers only to the Arkansas-law credit, not to any similar credit a different state may offer. So the Arkansas statute that says no property owner "shall claim more than one (1) homestead property tax credit for each year" does not, by itself, sweep in out-of-state credits.

But she immediately added a major caveat: Arkansas's homestead credit can be claimed only on the owner's principal place of residence, and most other states' credits work the same way. Since a person can only have one principal residence at a time, anyone simultaneously claiming both credits is likely misrepresenting principal residence to at least one state's tax authority and is thus likely violating that state's law (just not Arkansas's by virtue of the dual claim alone).

Because the answer to Question 1 was "no," Question 2 (whether the assessor must check for out-of-state credits) was moot.

Currency note

This opinion was issued in 2016. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Arkansas homestead property tax credit amount has changed since 2016 (it was $350 at the time of this opinion and has been increased by the General Assembly more than once since), and the implementing statutes have been amended. Anyone evaluating an actual homestead claim today should consult the current text of Amendment 79 and Ark. Code Ann. §§ 26-26-1118, 1119, and 1122 rather than the 2016 framework.

Background and statutory framework

Amendment 79 to the Arkansas Constitution requires the General Assembly to provide an annual state credit against ad valorem property tax on a homestead. At the time of this opinion the credit was $350 per year, set by Ark. Code Ann. § 26-26-1118(a)(1)(A).

Definition of "homestead." Amendment 79 ties the credit to a "homestead used as the taxpayer's principal place of residence." The implementing legislation defines a homestead in Ark. Code Ann. § 26-26-1122(a)(1)(A) as "the dwelling of a person that is used as his or her principal place of residence."

The one-credit limit. Ark. Code Ann. § 26-26-1119(a)(1) provides: "No property owner shall claim more than one (1) homestead property tax credit for each year."

Enforcement provisions in § 26-26-1119. The implementing legislation spells out what happens when a property owner unlawfully claims more than one credit. The consequences differ depending on whether the unlawful claim relates to land in the same Arkansas county as the lawful one or in another Arkansas county. Penalties collected are deposited with the county treasurer; tax credits to be repaid go to the state Property Tax Relief Trust Fund.

Why the AG read "homestead property tax credit" as Arkansas-only

The opinion gives three structural reasons:

1. No assurance of out-of-state penalty. The Arkansas statute references "the penalty" on a wrongly claimed credit, but there is no guarantee another state imposes a penalty at all. If the Arkansas legislature were thinking about out-of-state credits, the reference to "the penalty" would have nothing to attach to.

2. Where the money goes. The Arkansas statute directs penalties to a county treasurer and repaid credits to the Arkansas Property Tax Relief Trust Fund. Reading the statute to cover out-of-state credits would treat Arkansas as commanding deposit of payments owed to other states' governments, which is implausible.

3. Counties vs. parishes vs. cities. The statute uses the words "same county" and "a county other than the county." Out-of-state property taxes are sometimes levied by parishes (Louisiana), state-level entities, or municipalities, not counties. If the General Assembly meant to reach all out-of-state credits it would have left gaping holes that make no sense.

The "principal residence" trap

Even though Arkansas law does not itself bar the dual claim, the AG flagged the practical risk: "Clearly, only one residence can be a person's 'primary' or 'most important' residence." If the other state's credit is also principal-residence-restricted, then a person claiming both credits will inevitably be representing one state as the principal residence and the other as something else, and will be violating whichever state's law was tied to the secondary residence. In the dual-state scenario, the dual claim itself is the evidence of misrepresentation.

The AG acknowledged a narrow exception: if another state's "homestead property tax credit" by its terms does not require a principal residence (for example, a credit available on any qualifying home, including a vacation home), then dual claims could be lawful in both jurisdictions.

Common questions

Q: I own a home in Arkansas and a vacation condo in Florida. Can I claim Florida's homestead exemption and the Arkansas credit?
A: Under this opinion, the Arkansas statute alone does not block it. But Florida's homestead exemption requires the property to be the owner's permanent residence, and the Arkansas credit requires the Arkansas property to be the owner's principal residence. Both cannot be true at the same time, so claiming both is almost certainly unlawful under at least one state's law. Verify with current Arkansas and Florida law before relying on this.

Q: Is my Arkansas county assessor required to verify that I have not claimed a homestead credit in another state?
A: The AG declined to reach Question 2 because she answered Question 1 "no." Under § 26-26-1118(b), the duty to check for additional Arkansas credits is one thing; the opinion does not impose a duty on assessors to perform interstate checks.

Q: What is the penalty under Arkansas law for claiming two Arkansas homestead credits?
A: The opinion references Ark. Code Ann. § 26-26-1119 (a)(2) and (b)(3), which set out repayment plus penalty obligations and direct where the money goes. Specific amounts and procedures depend on whether the unlawful credit is in the same county or another county. Anyone facing an actual claim should consult the current statute text.

Q: What is a "principal place of residence" in Arkansas?
A: Amendment 79 and § 26-26-1122 require a single dwelling used as the owner's principal residence. The AG's opinion notes the dictionary meaning of "principal" is "chief; primary; most important," with only one such residence possible at a time. Day-counting, voter registration, driver's license, and similar indicators typically inform the factual determination.

Citations and references

Constitutional and statutory authority:

• Ark. Const. amend. 79, §§ 1 and 3, homestead property tax credit and definitions tying it to a principal place of residence
• Ark. Code Ann. § 26-26-1118 (Supp. 2015), amount of credit and assessor duties
• Ark. Code Ann. § 26-26-1119 (Repl. 2012), one-credit limit and enforcement
• Ark. Code Ann. § 26-26-1122 (Repl. 2012), definition of "homestead"

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2016-074
October 4, 2016
The Honorable Micah S. Neal
State Representative
800 Fairway Circle
Springdale, AR 72764-1032
Dear Representative Neal:
STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE

I am writing in response to your request for an opinion on whether Ark. Code
Ann. § 26-26-1119(a)(2)(B)(i), or any other Arkansas law, precludes an Arkansas
property owner who claims a homestead property tax credit in another state from
claiming a homestead property tax credit in a county within Arkansas during the
same calendar year.

Your specific questions in this regard are as follows:

1. Whether Arkansas law precludes an Arkansas property owner who claims a homestead property tax credit in another state from claiming a homestead property tax credit in a county within Arkansas during the same calendar year?

2. If the answer to Question 1 is "yes," whether the county assessor is tasked under Ark. Code Ann. § 26-26-1118(b) with checking outside of the State of Arkansas for other homestead property tax credits claimed in the same calendar year by an Arkansas property owner who has applied for a homestead property tax credit within the assessor's county?

RESPONSE

In my opinion, the answer to your first question is "no," but it should be noted that
a property owner who claims both the homestead property tax credit provided
under Arkansas law, and a similar credit provided under the laws of another state
that is available only with respect to the property owner's principal place of
residence, will necessarily be out of compliance with one or both states' principal-
residence condition. Because, in my opinion, the answer to the first question is
"no," the condition of the second question is not met.

DISCUSSION

Question 1: Whether Arkansas law precludes an Arkansas property owner who claims a homestead property tax credit in another state from claiming a homestead property tax credit in a county within Arkansas during the same calendar year?

Amendment 79 to the Arkansas Constitution requires the General Assembly to
"provide by law for an annual state credit against ad valorem property tax on a
homestead . . . ." The implementing legislation currently provides for an annual
homestead property tax credit of $350.

The implementing legislation also provides that "[n]o property owner shall claim
more than one (1) homestead property tax credit for each year."

The answer to your question thus depends on the meaning of the term "homestead
property tax credit" as used in the implementing legislation. If the term includes a
credit against property taxes levied under the laws of another state, then Arkansas
law clearly precludes claiming both such a credit and the homestead property tax
credit provided under Arkansas law.

In my opinion, however, the term "homestead property tax credit" does not
include a property tax credit claimed under the laws of another state. I reach this
conclusion because the implementing legislation indirectly indicates in several
ways that the term describes only the credit available under Arkansas law.

First, the implementing legislation sets forth consequences that arise from
claiming more than one homestead property tax credit. The consequences differ,
depending on whether the "unlawfully claimed" credit relates to land in the "same
county" as the one in which the credit is "lawfully claimed," or relates to land in
"a county other than the county" in which the credit is lawfully claimed. In the
latter case, the property owner "shall pay the entire amount of the unlawfully
claimed homestead property tax credit and the penalty at the time of payment . . . ."

But there can be no assurance that another state's laws impose any penalty on a
person who "unlawfully claims" a property tax credit under those laws. In the
absence of such a penalty, the implementing legislation's reference to one is
without meaning. This is a good indication the legislature was speaking only about
another county in Arkansas.

The implementing legislation also provides that penalties collected thereunder
"shall be remitted to the county treasurer to be credited to the county general fund"
and that tax credits repaid thereunder "shall be remitted to the Treasurer of State
for deposit into the Property Tax Relief Trust Fund . . . ." If the term "homestead
property tax credit" is taken to include a credit claimed under the laws of another
state, the implementing legislation's deposit requirements must be interpreted as
this state's attempt to require deposit in this state of amounts due under, and surely
payable to, governmental bodies in another state. Such an interpretation would not,
in my opinion, be reasonable or practicable. It is far more likely the legislature was
speaking specifically about Arkansas only.

Finally, the phrase "county other than the county" where the credit is properly
claimed cannot reasonably be interpreted to refer to all out-of-state entities that
may levy property taxes and allow credits similar to the Arkansas homestead
property tax credit. Louisiana, for instance, is divided into parishes, not counties.
Additionally, it is entirely possible that out-of-state property taxes may be levied
by the state itself or by a local entity, like a municipality, that is not a county or
analogous to a county. The implementing legislation's provisions setting forth
consequences of claiming more than one homestead property tax credit would not
reach credits granted by other states themselves, or by parishes or municipalities
within such states. There is no rational reason to believe the General Assembly
meant to address out-of-state tax credits and at the same time leave gaping holes in
the provisions addressing consequences of failure to comply with Arkansas law.

In my opinion, then, the term "homestead property tax credit," as used in the
implementing legislation, refers only to the credit of that name established under
Arkansas law. It follows that Arkansas law does not necessarily preclude a
property owner from claiming what may be called a "homestead property tax
credit" under the laws of another state, while also claiming the Arkansas credit,
and the answer to your question, in my opinion, is "no."

You should note, however, that my opinion does not mean that a property owner
may lawfully claim both the Arkansas credit and a similar out-of-state credit in
every instance. Instead, his claim of both credits may be evidence that he is
improperly claiming at least one of the credits.

Amendment 79 does not expressly define "homestead," but it refers repeatedly to
a "homestead used as the taxpayer's principal place of residence . . . ." In the
implementing legislation, "homestead" is defined as "the dwelling of a person that
is used as his or her principal place of residence . . . ." Thus a person may claim the
Arkansas credit only with respect to a principal place of residence.

The word "principal" means "chief; primary; most important." Clearly, only one
residence can be a person's "primary" or "most important" residence. If the other
state's credit is also available only with respect to a principal place of residence,
then a property owner's claim of both credits will necessarily involve his
misrepresentation to at least one of the states with respect to the location of his
principal place of residence. If his principal place of residence is located in the
other state, then his claim of the Arkansas credit is unlawful because the Arkansas
credit may not be claimed except with respect to the principal place of residence.
If his principal residence is located in Arkansas, then his claim of an out-of-state
credit that is also available only with respect to the principal place of residence is
unlawful. (It is at least possible, of course, that another state could provide a credit called a "homestead property tax credit" without limiting it to principal residences. In such a case, a property owner who owned a principal residence in Arkansas and, say, a vacation home in the other state, could lawfully claim both credits.) Determining which credit is properly claimed will involve determining
the location of the property owner's principal residence. This question is one of
fact.

Question 2: If the answer to Question 1 is "yes," whether the county assessor is tasked under Ark. Code Ann. § 26-26-1118(b) with checking outside of the State of Arkansas for other homestead property tax credits claimed in the same calendar year by an Arkansas property owner who has applied for a homestead property tax credit within the assessor's county?

Because, in my opinion, the answer to your first question is "no," the condition to
this question is not met.

Sincerely,

LESLIE RUTLEDGE
Attorney General