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HOPEWELL: Area residents scramble to pre-pay taxes in wake of federal GOP tax bill

Reed Hunt waited patiently in line at the Hopewell Township Tax Collector’s Office last week, two days after Christmas.

His mission – to find out how much money he would need in order to pre-pay at least some of his 2018 property taxes. Like many others waiting in line at the Tax Collector’s Office, Hunt was scrambling to take advantage of the unlimited deduction of expenses to reduce his taxable income at the federal level for 2017.

That’s because beginning in 2018, the new tax reform law puts a $10,000 cap on the amount of state and local taxes -including property taxes – that a taxpayer can claim as an expense to reduce the amount of income that will be taxed at the federal level.

“We will be punitively affected [by the tax reform law],” said Hunt, whose Hopewell Township property tax bill is more than $10,000. “I think a lot of people are doing a bit of scrambling [to pay their 2018 property taxes early].”

Hunt was not alone in his concern, since the average property tax bill in Hopewell Township is $12,952. He was joined by hundreds of other property owners last week who also sought to pay their property tax bills in advance.

Immediately after the tax reform bill was signed into law on Dec. 22, there was confusion over whether a property owner could pre-pay some or all of the 2018 property tax bill during 2017.

State law already allows property taxes to be paid in advance of the quarterly due dates of Feb. 1, May 1, Aug. 1 and Nov. 1, but an executive order signed by Gov. Chris Christie on Dec. 27 reinforced it.

The executive order directed towns to accept pre-payment of the 2017-2018 property tax bill if the payment was made before Dec. 31. As a result, the Hopewell Township Tax Collector’s Office collected more than $9 million in pre-payments as of last week – compared to $839,000 in property tax pre-payments in 2016.

While there were lines at the Hopewell Township Tax Collector’s Office, there were no lines at the Hopewell Borough or Pennington Borough tax collector’s offices last week.

In Hopewell Borough, which has 662 residential properties on the tax roll, there was some “pretty steady traffic” of property owners who wanted to pre-pay a portion of their 2018 property taxes in advance, Borough Administrator Michele Hovan said.

“There was unusually high walk-in activity,” Hovan said. More than 100 property owners pre-paid a portion of their 2018 property taxes. The tax bill on a home assessed at the borough average of $403,995 is $11,428.

“The news media did a good job of advising New Jersey residents of the specific impact on them, resulting from the changes in the tax law,” Hovan said.

The story was much the same in Pennington Borough, according to Tax Collector Wayne Blauth – no lines, but his office was a little busier than usual for the end of December.

“We got a lot of calls from people, asking if they can pre-pay their 2018 property taxes,” Blauth said. “They started to come in [immediately after the tax reform bill was signed].”

Some property owners paid all of their 2018 property tax bills, although only the first half had actually been billed. Others paid just the first two quarters of 2018 – the property taxes that were due Feb. 1 and May 1.

Blauth estimated that about 25 percent of property owners made the trek to the Tax Collector’s Office to pre-pay their property tax bills. The average residential property tax bill in Pennington Borough is about $14,000.

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