Commercial taxD.C. Councilman David Catania has asked the city's attorney general and the council's general counsel to provide him opinions on Chief Financial Officer Natwar Gandhi's interpretation of a commercial real estate tax law that a group of attorney's say has cost the city more than $100 million. In response to questions from Ward 2 Councilman Jack Evans about the issue, Gandhi said last week that he stands by how his office has interpreted the law. He has also asked Evans to introduce legislation on his behalf that would clarify the law's language. In 2001, the council passed a series of bills to reform the city's tax code.
Among those bills was one that allowed the city to tax refinanced commercial mortgages. The D.C. Office of Tax and Revenue, which Gandhi oversees, has been taxing commercial property on the refinanced portion of the mortgage. But real estate attorneys Jeffrey Mitchell and Douglas Patton say the office should have been taxing the entire amount of the original loan. For example, if a commercial property owner has a $100 million loan and refinances $50 million of it, the city has taxed the $50 million. Mitchell and Patton say it should tax the $100 million. In a letter sent to Gandhi on Thursday, Catania said Gandhi's explanation to the council supporting Gandhi's interpretation is "disingenuous."
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