Failure to pay taxes never a ‘business decision’

Posted March 14, 2010, at 7:37 p.m.

Q. I went to a school board meeting recently that was pretty lively. At one point, a parent stood up and asked one of the directors on the board how he could argue for a budget that will raise taxes when it is a matter of public record that he hasn’t paid his property taxes in three years. The director did not deny this — he said “it was a business decision.” I was floored! In what way can not paying taxes be a “business decision”? And is it legal for such a person to be in a position to make budgets that raise taxes on others? I would really like to hear anything a tax lawyer might be able to say about this situation.

A. Despite what that director might like to think, payment of property tax is not a “business” decision: Taxes are due and payable as set forth by Maine law. The property tax may be considered a business expense and a legitimate deduction on a properly filed income tax return, but this does not negate the duty to pay the property tax in the first place.

As to whether it is legal for such a person to be in a position to make budgets and raise taxes, the answer is yes. In most if not all Maine communities, school board members are elected by the voters. Voters are free to elect whomever they choose, regardless of that person’s honesty, dishonesty, or penchant for disregarding tax or any other laws.

While it is offensive to most of us, there is no enforceable code of ethics other than public opinion that might prohibit a school board member from being a tax cheat, embezzler or common thief. Let’s hope the taxpayers of your town make a sound “business decision” and vote this person out of office. And the town should be aware that it needs to take the same legal action against him as it would against any other property owner in arrears with local taxes. That director is probably kicking himself for putting his foot so firmly in his mouth.

This column is a service of the Lawyer Referral and Information Service of the Maine State Bar Association. Its contents are a general response to the question and do not constitute legal advice. Questions are welcome. E-mail AAL@mainebar.org, describe your question and note you are a BDN reader. Written questions mailed to “Ask a Lawyer,” Bangor Daily News, P.O. Box 1329, Bangor, Maine, 04402-1329 will be forwarded to the LRIS.

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