The National Association of Independent Housing Professionals (NAIHP) reported last week that many Appraisal Management Companies (AMCs) are operating in states where they have failed to pay state income tax, according to real estate trade publication The Niche Report. Despite requirements of the federal government, NAIHP found that AMCs may be registered in some states, but operating in many more states than where they are registered.
The Niche Report writes:
When businesses are formed, they are required to register with their Secretary of State, for authority to conduct business. That registration alerts the State Tax Department you exist and may be responsible for certain taxes. The same holds true if you operate outside your home state, according to Marc Savitt, NAIHP President.
“Most AMC’s are only registered in a handful of states, but operate nationwide. If you’re not registered, you’re not paying taxes,” said Savitt. Although, HVCC and now Appraiser Independence rules don’t mandate the use of AMC’s, many banks and large lenders, who own all or part of certain AMC’s, require their usage by consumers. RESPA requires disclosure of these affiliated relationships.
After polling NAIHP members in several states, “we haven’t found one AMC or any of their partners disclosing these affiliations. We’ve also discovered other RESPA violations as well,” said Savitt.
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Written by Elizabeth Ecker