Local Tax Collectors Swamped With Requests To Pre-Pay Property Taxes

Residents line up to pay their property tax bills to the Cuyahoga County Treasurer on Thursday, just one day before the county's final tax collection day of the year. [Adrian Ma / ideastream]
Residents line up to pay their property tax bills to the Cuyahoga County Treasurer on Thursday, one day before the county's final tax collection day of the year. [Adrian Ma / ideastream]
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Homeowners across Ohio are racing to pre-pay their 2017 property taxes before year's end, in hopes of taking advantage of unlimited state and local tax deductions before they're capped under the new tax overhaul signed by President Trump last week.

But the rush is creating uncertainty for both taxpayers and tax collectors. 

"This year because of the Trump tax bill, we have never been busier," said Geauga County Treasurer, Chris Hitchcock.

Although the county won't mail out tax bills until early January, he said his office is swamped with folks hoping to save money by pre-paying their property taxes now. In the past couple of weeks, he said his office has received about a thousand payments, which is triple the number of payments he normally sees this time of year. 

Likewise, Lake County Treasurer, Lorraine Fende, said her office has been fielding a barrage of requests to pre-pay, even though her office also hasn't mailed out official tax bills.

"This is very, very unusual," she said Thursday. "Right now there's a line outside our door of people wanting to pay."

Although taxpayers technically have until December 31 to make an early payment, Lake County residents only have until 4:30pm on December 29that's when Fende said her office will close for New Year's.

Some homeowners, in their eagerness to avoid the $10,000 cap on state and local tax deductions, have tried to get a jump on future payments.

"We have people that would like to pay several years of taxes so they can take advantage of the deduction, but the law doesn't allow that," Hitchcock said. 

But what the law allows is still an open question. The IRS issued a statement Wednesday, saying that homeowners can avoid having their 2017 property tax deductions capped if their taxes are paid and "assessed" before 2018. But Fende said the agency's guidance is vague.

"The key word there is 'assessment,'" Fende said. "What is the IRS's definition of 'assessment?'" It is not clear, she said, whether the term refers to the process of calculating the amount owed on a property or the mailing of an actual tax bill, she said. How the IRS answers that question will likely affect which taxpayers will benefit from pre-payment and which don't.

Either way, both Hitchcock and Fende said they aren't currently planning to refund payments that don't make the cut. 

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