D.C. Chief Financial Officer Natwar Gandhi has determined his office did not misinterpret a tax law after two lawyers claimed Gandhi’s office left more than $100 million on the table by doing so. The law passed in 2001 allowed the city to collect taxes on refinanced commercial mortgages. The city’s tax office has taxed only the refinanced portion of the mortgage. Attorneys Jeffrey Mitchell and Douglas Patton say the entire principle of the mortgage should have been taxed.
In a letter to Councilman Jack Evans sent Wednesday, Gandhi wrote he believes “the law governing taxation of these transactions has been correctly implemented.” Gandhi relied on a fiscal impact statement from 2001 that concluded the law made no changes to the revenue the city would raise.
Gandhi asked Evans to introduce legislation that would back the CFO’s interpretation.
But testimony from 2001 includes witnesses who said commercial real estate industry would be hit hard by the tax. Mitchell and Patton also say attorneys have spent the past decade dodging the tax because they believed the city was taxing the entire mortgage.
“The CFO seems to imply… [that] if he fails to properly prepare a fiscal impact statement, he is excused from implementing the law correctly,” at-large Councilman David Catania said.
?– Freeman Klopott
