HOMEOWNERS RUSH

to prepay property taxes to make most of deduction.

CHERRY HILL, N.J. — In a season of sales, homeowners in affluent towns across the country are rushing to take advantage of a tax deduction before the coming tax overhaul limits it.

Tax collectors in many communities are seeing a surge in property tax prepayments before 2018 in an effort to cash in — for one last year. The tax office at the Cherry Hill Township building in New Jersey, for example, saw a steady stream of property owners Friday.

One man said his buddies at an early morning hockey game said it would be a good idea to prepay. A couple was there because their accountant called to recommend it. And Ron Brand — an accountant, though he doesn’t do other people’s taxes — was there with $15,000 to pay a full year’s worth of 2018 property taxes.

“I’m hoping to get a 22 percent return on my money,” he said, calculating that every dollar he could deduct from his income this year would mean 22 cents less in federal taxes.

Since a national income tax began more than 100 years ago, people have been allowed to deduct from their income the amount they’ve paid for state and local taxes.

But under the tax legislation President Donald Trump signed into law Friday, there’s a $10,000 cap on the deductions.

That’s going to hit hard in states such as California, Connecticut, New Jersey and New York — states where the average state and local deductions in 2015 all topped $17,000. In New Jersey, the average property tax bill alone was nearly $8,300 last year and there are scores of towns where the average bill is above the $10,000 threshold.

In New York, Democratic Gov. Andrew Cuomo signed an executive order Friday allowing New Yorkers to prepay their 2018 taxes to local governments and schools by Jan. 1 and claim the deduction on their 2017 taxes.

At the Cherry Hill, N.J., tax office, the big question was how much to prepay.

Some people heard they’d be able to deduct the payment for only one quarter, others the whole year. Lewis Eron and Gail Trachtenberg were trying a half year’s payment.

“I would pay more if I could get more tax deductions,” Eron said.

In nearby Moorestown, tax collector Jennifer Della Valle said someone inquired about paying taxes for two years.

It’s not clear what deductions the IRS will accept. The new law specifically bars taking deductions for income taxes paid ahead of time, but it is silent on prepaid local property taxes.

And tax offices in different places have very different positions on whether they would accept prepayments.

This week, more than 50 people called the tax office in the Atlanta suburb of Cobb County to ask about prepaying property taxes.

“We’ve told them, ‘Absolutely not!’” said Tax Commissioner Carla Jackson.

Jackson said there is a long, prescribed process under state law that requires an assessment, an opportunity for the homeowner to appeal and state approval of the county tax digest among other steps.

Arkansas’ tax collectors also have drawn a red line, citing state law.

Dozens of Arkansans have called their county tax collectors’ offices, hoping to prepay property taxes due in October 2018.

But Joy Ballard, Saline County tax collector, said that isn’t possible.

Because of a longstanding state statute, property taxes are assessed and collected in different tax years in Arkansas. In 2017, for example, people paid their 2016 property taxes.

Ballard said her office won’t see the 2017 property tax roll for Saline County constituents until mid-January, at which point those figures have to be verified before the first statements are sent out in March.

Right now, she can’t tell anyone what those taxes will be, let alone allow people to pay them.

“I don’t even know what my taxes will be next year,” Ballard said.

Rhonda Nolan, chief deputy tax collector in Faulkner County, said about a dozen people so far have asked to pay early to maximize deductions.

Nolan said she echoed the same sentiment as Ballard.

“We don’t even have those amounts,” Nolan said. “So we don’t even know what we could collect.”

“We’ve been flooded with calls,” said Bentley Hovis, chief deputy treasurer for Pulaski County.

All week, once it became clear the tax code overhaul would get passed, people have tried to pay their taxes early, Hovis said. But the 2017 property tax book doesn’t even “exist” yet to tax collecting officials, he said. It’s not uploaded in their system.

“If you send your money into us, we’ll send that money back,” he said.

When this reality was explained to people, some of them understood, and some of them were “kind of insistent,” Hovis said.

One man said he would call the Arkansas Legislative Audit to try to find a loophole.

To that man, Hovis said, “I wish you luck.”

Information for this article was contributed by Geoff Mulvihill, Christina A. Cassidy and David A. Lieb of The Associated Press and by Emma Pettit of the Arkansas Democrat-Gazette.