Tax Law Creates Confusion and Uproar in City Halls Across America
Mass confusion is erupting in town halls across the country thanks to the new tax law, as tens of thousands of property owners scramble to pay next year’s taxes ahead of schedule — while the governors of their states and the IRS give conflicting signals about whether that’s even allowed.
In the Albany suburb of Bethlehem, N.Y., more than 100 people waited in a gym to pay their property tax bills — some of them for over an hour — on Thursday before a new federal $10,000 cap on state and local deductions goes into effect Jan. 1. Municipalities on Long Island were preparing to open over the weekend to give taxpayers more time to pay. But the IRS issued an edict Wednesday night saying the early payments could only be deducted on 2017 taxes if they had already been assessed. That threw residents and local government officials into a new round of confusion as everyone scrambled to determine which payments would qualify.
The uncertainty this week could be the first of many misunderstandings to come as new tax rules take effect starting New Year’s Day. The tax law that President Donald Trump signed Dec. 22, which Congress rushed to pass before the end of the year, is explicit in some of its language, but vague in other areas. It explicitly forbade prepayments of state and local income taxes but was silent on prepayments for state and local property taxes.