Taxpayers descend on town hall, looking to avoid new $10,000 cap on deductibility of state and local taxes

The tax receiver’s office is suddenly the most popular place in town.

Inspired by a change to federal income tax law that caps the deductibility of state and local taxes at $10,000, residents have been lined up outside the Riverhead tax receiver’s office since it opened for business at 8:30 yesterday morning.

“It’s been crazy, crazy, crazy,” Riverhead Receiver of Taxes Laurie Zaneski said this afternoon. “At one point, the line wrapped around the corner by the supervisor’s office and down the other hallway.”

People were waiting in line when she arrived at Riverhead Town Hall at 8 yesterday morning, after President Donald Trump signed a sweeping tax reform bill into law on Dec. 22, before the three-day holiday weekend.

The tax receiver’s office will be open for business from 8:30 a.m. until 4:30 p.m. tomorrow and Friday, which will be the last chance to pay 2017/2018 property taxes in person in the current calendar year; the office will be closed this weekend.

Tax payments can be made online as well as by mail, Zaneski said. Payments postmarked by Dec. 31 will be credited as of that date, she said, even though town hall will not reopen until Jan. 2.

Zaneski estimated her office collected at least double of what it normally collects at the end of a calendar year. Suffolk County Executive Steve Bellone offered each of the 10 towns in Suffolk clerical help to process the extraordinary volume of taxpayer payments, Zaneski said.

“We’re all in the same situation,” she said.

The property tax year in Suffolk County runs from Dec. 1 through Nov. 30. Property tax bills may be paid in two halves, with the first half due on or before Jan. 10 and the second half due by May 31. People are opting to pay the full year’s tax bill now, so they can deduct the payment on their 2017 federal income tax returns, Zaneski said — before the new tax law takes effect.

Even people who pay their property taxes through their mortgage holders are coming into town hall to pay their tax bills directly, she said. This will create “a nightmare” for the tax receiver’s staff later on, when they will have to issue refunds to the mortgage servicing companies — which often pay multiple property tax bills with one check.

Although residents are rushing to make their property tax payments in 2017, doing so may not necessarily be beneficial to every taxpayer. “I spoke to a tax consultant who said it will vary from taxpayer to taxpayer,” Zaneski said. “We’ve been advising residents who ask us that they should contact their accountant or tax preparer before making the payment.”

The controversial Tax Cuts and Jobs Act, the biggest federal tax code overhaul since 1986, drew fire from officials in states like New York, where state and local income and property taxes often exceed the $10,000 deductibility cap. Gov. Andrew Cuomo said the new law will increase federal taxes on New Yorkers by more than $14 billion.  

First District Rep. Lee Zeldin (R-Shirley) broke with his party to vote no on the tax reform bill, which he called “a geographic redistribution of wealth” that penalized states like New York.

“While I support fully maintaining the SALT deduction, a better policy if a change was to be made would have been a phase-down of SALT over a period of time to a level that fully protects middle income itemizers,” Zeldin said.

Though the new law caps the state and local tax deduction at $10,000, it also nearly doubles the standard deduction, from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples filing jointly. Proponents of the law argue that many taxpayers who now itemize deductions on their federal returns — including deductions for state and local taxes — will no longer need to do so.