Gov. Asa Hutchinson punted to local officials yesterday on the question of whether Arkansans could pay taxes not due until 2018 this year and avoid the new cap on state and local tax deductions that take effect next year.
The IRS has said under certain circumstances taxes can be deducted this year if paid early — if the taxes are a result of assessments this year.
Pulaski County Treasurer Debra Buckner says forget about it in this website message:
With the new tax package passed by Congress and signed by President Trump, federal income taxes will begin to limit the amount of state and local tax payments that can be deducted to a $10,000 cap beginning in 2018.
The question has been raised by some taxpayers would a pre-payment of the 2018 taxes (property and income) before the end of 2017 allow those tax payments to be deducted without the cap which goes into effect on January 1, 2018.
Under A.C.A. 26-35-501, Arkansas law articulates that property ad valorem taxes shall be due and payable on and from the first business day in March to and including October 15, and thus does not allow a provision for the prepayment of taxes.
Here’s more from the Washington Post on the complexities of this question, including whether it’s necessarily wise for the higher income people looking for a way around the new rule to rush into the decision.
UPDATE: Buckner provided this elaboration on her website statement:
We consulted & verified with AR Legislative Audit, Pulaski County Attorney and Association of AR Counties, pulled ACA 26-35-501 and other statutes.
Unanimously, the results are that there is no provision to accept pre-paid taxes. Ever.
Why? Arkansas is a tax ‘In Arrears’ state – not Current Year like most states.
The Assessor does not roll the Value Abstract until mid-January
We apply the various certified mileages, create the financial matrix and generate the new tax books in February for billing to begin March first as described in law.
Therefore, we do not have the assessed values yet.
Until they are delivered and balanced, they are not completed or available.
Also, 2017 was the five yr reappraisal cycle for the PC Assessor. It’s likely that different taxable amounts will be computed with the completion of the required annual processes.
We are in the tax collection business-to pay for the services that our citizens enjoy.
We studied this matter in earnest literally the hour the federal Tax Bill passed on 12-20-17.
If there had been any way to legally know tax amounts at a parcel level or accept payments, etc.,we would have of course made it happen.