Montgomery County Council Reconsidering Allowing Property Tax Prepayment; Special Session Scheduled

Announcement on Saturday comes after council previously rebuffed the idea


Members of the Montgomery County Council

via County Council website

The Montgomery County Council has changed its collective mind.

The council on Saturday announced in a press release it will hold a special session on Tuesday at 10 a.m. to vote on a bill to enable the county to accept prepayment of property tax.

The decision to hold the special session comes after Council President Hans Riemer on Thursday informed County Executive Ike Leggett that a majority of the nine-member council was wary of accepting 2018 property tax prepayments before the end of the year. He cited the lack of a public process and the confusion it might create.

Riemer said Saturday that many residents contacted council members requesting that the county accept prepayments. Other jurisdictions, such as Washington, D.C., and Howard County, announced they would accept prepayments, so residents could potentially take advantage of the uncapped state and local tax deduction to reduce overall income tax payments.

The new tax cut bill caps the local and state deduction at $10,000. In Maryland, about 45 percent of taxpayers take the deduction, for an average of $13,000, according to IRS statistics. While the new federal bill bans prepayments on income tax, it does not bar property tax prepayments.

By prepaying, some residents might be able to take the full state and local tax deduction on their 2017 tax returns and reduce their overall tax payments.

Riemer said the council will introduce a bill Tuesday, hold a public hearing and vote on it to allow the prepayments. The special session means council members will return from their winter recess, which was scheduled to end in mid-January, to take up the bill.

“If that’s what residents want, we’re going to make it possible for them to do it,” Riemer said Saturday.

He said earlier this week several council members were concerned about moving forward without the public process and they lacked information about whether it could reduce income tax revenues for the county.

“The urgency of this issue has really grown,” Riemer said. “We totally understand there are a lot of people that want to take advantage of this opportunity if we can create it.”

He said the fiscal impact on the county remains unknown and the county doesn’t know how many people might take advantage of prepayments.

Council member Roger Berliner, who initially pitched the idea and believed it had council support before Riemer’s memo to Leggett, said Saturday that he’s pleased the council is reconsidering.

“We should do what we can to help and protect our residents,” Berliner said Saturday. “I hope we would save our residents from one of the most harmful provisions of the Republican tax bill to our community.”

President Donald Trump signed the newly approved tax bill on Friday.

It’s not immediately clear if the 2018 prepayments will be deductible in 2017, as the IRS still needs to create regulations around the new federal bill, according to The Baltimore Sun.

Patrick Lacefield, a county spokesman, said Saturday that if the council approves the bill, the county will push out information next week on how taxpayers can prepay. He said taxpayers can estimate their 2018 payment based on their 2017 payment.

If any taxpayer overpays by prepaying, the county will refund the amount greater than the tax owed. If they underpay, the county would send bills for the remaining amount owed.

Although other jurisdictions in the area could legally accept prepayments, Montgomery County could not because it had not passed a law to do so. The special session on Tuesday would enable the council to do that.

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