Montclair Property Owners Made $28M In Tax Prepayments: Report

MONTCLAIR, NJ — What could possibly inspire 2,500 Montclair property owners to fork out a whopping $28 million in tax prepayments for 2018? Three words: Trump tax reform.

According to a recent report, a staggering amount of Montclair property owners chose to prepay their 2018 taxes before the New Year, including a last-minute, 150-person surge on Dec. 30. Before that, they were coming in at a rate of 50 to 100 per day, Township Tax Collector Lidia Leszczynski told Montclair Local.

Many of those who chose to make prepayments were doing so as the state gets ready for big – and potentially painful – changes under the Trump Administration’s recently passed federal tax reform law.

Many New Jerseyans have been filing early, worried that the tax changes - as they're expected to have - will hit high-tax states harder than others. Trump's tax plan caps the amount of money local taxpayers can deduct on state and local income taxes (SALT) at $10,000. That cap could prove burdensome for many New Jerseyans, who already pay some of the highest property taxes in the nation.

Most New Jersey towns operate on a July-June fiscal-year budget, so homeowners get tax bills for property that's been assessed through June 30.

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In Montclair, property owners only had first- and second-quarter 2018 tax bills to prepay, Montclair Local reported. However, many residents also chose to pay their full year of taxes, despite an earlier advisory from the IRS that the prepayment of property taxes that weren't assessed prior to 2018 are not deductible in 2017.

• See related article: IRS's Order On Prepaying 2018 NJ Taxes (What Does It Mean?)

Montclair town officials chose to open the tax collector’s office on Dec. 30 – a Saturday - so that property owners who would like to pay 2018 taxes in advance have additional time to do so.

Montclair Mayor Robert Jackson said that since the new federal tax bill was signed into legislation December 22, it left local property owners little time to meet the end-of-year deadline if they are considering prepaying 2018 taxes.

"Given the recent influx of queries to the township regarding 2018 property tax prepayment, we decided to provide additional time on a Saturday for those residents and business owners who wish to pay their 2018 taxes in advance," Jackson said.

Leszczynski told NPR that the scene in the municipal tax collector’s office was “very chaotic” leading up to last weekend’s deadline.

“It's like a revolving door,” Leszczynski said. “People coming in. People going out. We are getting phone calls nonstop. I mean, the phones are - literally they just don't stop.”

• See related article: Is There A Trump Tax Reform Hack In Montclair?
• See related article: Chris Christie Issues Order Allowing You To Prepay 2018 NJ Taxes

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With previous reporting by Tom Davis