PROVIDENCE, R.I. — When David Reiser went to Narragansett Town Hall to prepay the 2018 property taxes on his Ocean Road home this week, he said, the clerk refused to take the check.
But because his tax adviser told him that was a mistake on the town's part, he has sent the payment in via certified mail. Since then, he said, he has learned that about 200 people contacted the Narragansett tax office about prepaying their taxes, and they were also told the town would not accept pre-payments.
According to an IRS advisory issued Wednesday afternoon, prepaid property taxes may be deductible in 2017 if assessed and paid in 2017. The IRS was responding to widespread confusion created by the new tax law passed by Congress. The law puts a new $10,000 limit on the amount of state and local taxes that may be deducted, beginning in 2018. This has spurred many to take maximum advantage of the deduction in 2017 by prepaying taxes.
Reiser's accountant, Grafton "Cap" Willey IV, said that because 2018 property tax bills in Rhode Island are based, according to state law, on assessments as of Dec. 31, 2017, the 2018 property taxes will be deductible if paid in 2017, even though the towns "don't get around" to mailing out the tax bills until the middle of 2018. In Massachusetts, this is not the case, because the 2018 property taxes are based on assessments as of Jan. 1, 2018, he said.
Across Rhode Island, cities and towns have taken different stands on whether or not to accept 2018 property tax payments. Jamestown is accepting the payments. Barrington is not. Willey, who is a Portsmouth resident, said 2018 property tax payments have been accepted in Portsmouth, North Kingstown and South Kingstown.
The State of Rhode Island has been accepting 2018 personal income tax payments, according to Paul Grimaldi, chief of information and public relations for the R.I. Department of Revenue.
Grimaldi added that "Rhode Island allows people to prepay their property taxes," though the state hasn't ordered cities and towns to accept them.
Uncertainty about the ramifications of the new tax-reform law is not limited to Rhode Island. "There's confusion across the country," Grimaldi said. In New Jersey, Gov. Chris Christie on Wednesday signed an executive order that requires municipalities to credit early payments of 2018 taxes. The prepayments must be postmarked by Dec. 31.
As for Narragansett, Tax Collector Christine Beck refused to comment on the town's policy. She said she is "not speaking to the paper," and referred questions to Town Manager James M. Manni, before hanging up the telephone during an interview. Manni could not be reached for comment. The Town of Narragansett's website said Town Hall was closing at noon Friday, and would reopen Jan. 2.
—cdunn@providencejournal.com
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On Twitter: @ChristineMDunn