McKeon, Jasey & Freiman Bill to Lessen Impact of Trump’s Recently Enacted Property Tax Cap on Taxpayer Deductions
Recent Changes to Property Tax Requirements Prohibit Residents from Claiming Thousands of Dollars
on their Federal Tax Return
(TRENTON) – An Assembly panel advanced legislation Monday sponsored by Assembly Democrats John McKeon, Mila Jasey and Roy Freiman to counteract the cut in allowable property tax deductions imposed under the new federal tax changes.
“Trump’s tax cuts disproportionately affect states with the highest property taxes, like here in New Jersey,” said McKeon (D-Essex, Morris). “Taxpayers who pay more than 21,000 in state and local taxes lose the ability to claim anything over $10,000 in property taxes. That’s a huge loss for New Jersey households. With this bill, municipalities will hopefully help taxpayers lessen the impact property tax deduction limits will have on their federal tax returns.”
The bill (A-3499) would permit a local unit, consisting of a municipality, county or school district, to establish one or more charitable funds, each for a specific public purpose, and permit property tax credits in association with certain donations.
The bill provides that once a charitable fund is established, the bill would allow anyone to donate to it. However, if a donation is made on behalf of a real property within the jurisdiction of the local unit, the property would be entitled to a property tax credit on the next property tax bill assessed after the donation is processed.
“Some New Jersey towns are already looking into this concept,” said Jasey (D-Essex, Morris). “Taxpayers will need relief from President Trump’s near-sighted tax cuts and allowing municipalities to create a charitable fund is a way which makes sense.”
“Homeowners would make contributions to pay for public services, which would be subject to a tax credit to offset that donation,” Freiman (D- Somerset, Mercer, Middlesex Hunterdon). “A charitable fund option would protect taxpayer investments into their communities and create a way for them to recuperate some of the loss they would experience under the new property tax limits.”
Under the bill, the limit on tax credit funding would equal 90 percent of the annual donation cap, or a different percentage as determined appropriate by the Director of the Division of Local Government Services (“DLGS”) in the Department of Community Affairs.
The sponsors note that homeowners, who already pay their property taxes monthly, wrapped in with their mortgage payment, would have to work with their lenders to ensure that there would be less or no property tax paid.
Fair Lawn, Paramus and Park Ridge are currently devising plans based on the concept of the bill.
The bill cleared the Assembly State and Local Committee; it will now be considered for an Assembly floor vote.
|Mar. 12, 2018||Majority Press Office