With uncertainty still swirling about whether taxpayers can deduct property tax prepayments, Arlington County is offering refunds for those who have already made deposits.
County Treasurer Carla de la Pava said the county has already collected around $18.2 million in prepayments from 2,300 accounts, with it still unclear whether taxpayers can deduct those prepayments from their 2017 federal taxes.
And unlike some other jurisdictions, de la Pava said, Arlington is offering refunds on prepayments for those who have changed their minds about paying early. She said around 75 people so far have requested a refund.
“This bill was passed through Congress, and it was very quick and it caused a lot of uncertainty,” she said. “I do not want that uncertainty to penalize Arlington citizens.”
Under the new GOP tax bill, State and Local Tax (SALT) deductions are capped at $10,000. For many Arlington taxpayers with pricey homes, this means they will lose part of their deduction next year and thus potentially pay higher federal taxes.
The Treasurer’s Office issued an advisory on how to request a refund on December 28, the morning after a ruling by the IRS limiting deductions to property taxes assessed in 2017.
Arlington is unable to assess 2018 property taxes until the County Board sets the tax rate in April, and de la Pava said with so many things still up in the air, it was better to give taxpayers options.
“It’s interesting, because what I’ve heard from many people is that they are certainly not going to request a refund right away because I think there’s a sense in the community that… things might change,” she said. “I even had one customer suggest that there might be something brewing in Congress that would make that IRS advisory stale information. There’s a lot of uncertainty still.”
The full advisory issued by the Treasurer’s Office is after the jump.
(Updated at 1:55 p.m.) Arlington County has collected some $11.5 million in property tax deposits for future years, according to Treasurer Carla de la Pava, but it’s unclear whether taxpayers will be able to deduct those prepayments from their 2017 federal taxes.
Following a ruling by the IRS yesterday, limiting deductions to property taxes assessed in 2017, the county issued a statement Thursday afternoon that made it clear that Arlington is unable to assess 2018 property taxes until the County Board sets the tax rate in April.
The Arlington County Treasurer’s Office and Arlington County have received multiple inquiries based on the statement issued by the Internal Revenue Service on December 27, 2017, concerning deductibility of the property taxes. Neither the Treasurer nor the County staff will be offering individuals advice on tax issues and suggest people consult with a tax professional for any IRS related questions.
Arlington County, through the Department of Real Estate Assessment issues real property tax assessments each year in mid-January. The assessments for Calendar Year 2018 will be completed in mid-January and mailed to residents at that time.
Bills for taxes owed for calendar year 2018 are generated by the Treasurer after a tax rate is set by the County Board in April.
Those bills are due and payable in two installments – by June 15 for the first portion, and October 5 for the second portion.
De la Pava says the tax office has been inundated with tax deposits this week, but the activity has slowed considerably since the IRS ruling.
Taxpayers hoping to save on their taxes before the $10,000 cap on state and local tax (SALT) deductions goes into effect next year have jammed the phone lines and the payment queues of the treasurer’s office. So far, $11.5 million in deposits have been made across more than 1,500 tax accounts, de la Pava said.
That includes some $4.5 million collected over a six hour span Wednesday, before the ruling, but it also includes $1.8 million collected today following the IRS determination.
De la Pava said that her office, which is roughly two-thirds staffed because of the holidays, handled 1,500 phone calls yesterday, while keeping wait times to around 30 minutes.
“It was crazy,” she told ARLnow.com. “They did the best they could.”
De la Pava and other county officials are being careful not to give federal tax advice to residents given the ongoing uncertainty.
“The only thing I can say is that the real estate assessments have not been made and will not be made in 2017,” she said.
Bobby Grohs of RLG Tax Advisors, an Arlington-based CPA firm, told ARLnow.com that the letter of the law suggests that deposits for Arlington property taxes will not be deductible.
“A prepayment of anticipated real property taxes that have not been assessed prior to 2018 is not deductible in 2017,” he said. “Since Arlington does their 2018 assessment in January, prepaying these taxes in 2017 will not permit you to take a deduction on your 2017 tax filings.”
But that has not stopped the tax deposits, which are continuing to flow in, though at a reduced rate. Some taxpayers believe that there will be lawsuits that may end up reversing the IRS ruling, we’re told.
Other D.C. area jurisdictions, meanwhile, are collecting prepayments that should be deductible under the IRS rules. Among them are the City of Falls Church and the District of Columbia, which have already assessed next year’s property taxes.
The new GOP tax bill has prompted numerous Arlington taxpayers to prepay their 2018 taxes more than a year ahead of time.
The bill, which was just signed into law by President Trump this morning, caps State and Local Tax (SALT) deductions at $10,000. For many Arlington taxpayers with pricey homes, this means they will lose part of their deduction next year and thus potentially pay higher federal taxes.
To counter that, some Arlingtonians are planning to take a higher deduction on their 2017 taxes by prepaying their property tax for future years.
Arlington County and other Virginia localities allow residents to make tax deposits. County Treasurer Carla de la Pava tells ARLnow.com that more than $1 million in tax deposits have been prepaid by 144 residents as of Friday morning.
The Treasurer’s Office has been “inundated with people trying to pay in advance” and is expecting the prepayments to continue through the end of the year, de la Pava said. The first prepayment was made by an attorney about two weeks ago, when the bill was first passed by a narrow Republican majority in the U.S. Senate.
“It’s interesting because in Arlington [prepayments] started much earlier than anywhere else in the state,” de la Pava said, noting that it “has been a really big topic of conversation” on the Treasurers Association of Virginia email listserv.
Some prepayers are depositing more than a year of taxes in advance, while others are paying whichever potion of next year’s they can afford, we’re told.
Tax deposits have been an option for many years, but the Treasurer’s Office hasn’t seen a prepayment surge like this at any point in recent memory.
“We have never seen these volumes,” said de la Pava.
Tax deposits are invested by the Treasurer’s Office in “very safe” investments, earning a small return for the county.
De la Pava is encouraging taxpayers — particularly those paying the Alternative Minimum Tax — to consult with a CPA or tax expert before deciding whether to prepay. More from the treasurer’s website:
If you are interested in prepaying your 2018 taxes, the Treasurer’s Office can accept tax deposits on active Real Estate accounts. While our office does accept tax deposits, we are not experts in federal tax law and are not able to offer any advice, guidance, or opinion on whether or not your deposits will be deductible on your 2017 federal tax returns. If you have questions about making a tax deposit on your Arlington real estate, please email us at [email protected] or call 703-228-3090.
Two major property tax deadlines are next week.
Thursday, October 5 is the final due date for the payment of both vehicle personal property tax and the second installment of real estate tax. Payments postmarked after October 5 are subject to penalties and interest charges.
Residents can manage and pay their bills online on the county’s Customer Assessment and Payment Portal.
And the deadline for displaying the new car decals is Wednesday, November 15. This year’s decal is entitled “Arlington Sees Stars,” designed by Amy Kohan in the county’s 13th Annual Decal Design Competition.
The county treasurer’s web site has more information about paying tax bills and about the county’s Taxpayer Assistance Program. Residents can also contact the Treasurer’s Office directly by calling 703-228-4000 or emailing [email protected].
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Flickr pool photo by Erinn Shirley
The four finalists have been chosen for Arlington’s 13th annual Vehicle Decal Design Competition.
The contest, organized by the county Treasurer’s Office, received 235 submissions from Arlington high school students this year. It was narrowed down to the finalists, above, by a panel of local residents.
Arlington County residents can now vote (once) for their favorite through Monday, Jan. 16. Voting is taking place online and via mail.
The winner will be announced at a County Board meeting on Jan. 31, according to the Treasurer’s Office, and that design will then grace the windshields of 160,000 windshields from 2017-2018.
The winner will also get $750, while the runners-up gets $500 from the Arlington Community Federal Credit Union.
Four finalists have been announced for Arlington’s annual vehicle decal design competition.
The competition, which will determine which design graces the front windshields of some 160,000 vehicles in the county next year, is now in its 12th year. The finalists this year depict:
- The Arlington Education Center, which houses top Arlington Public School administrators
- Dark Star Park in Rosslyn
- The “Arlington” sign at the Arlington Cinema Drafthouse on Columbia Pike
- The Netherlands Carillon near the Iwo Jima memorial and Rosslyn
The public will be able to vote for their favorite design, starting Thursday, on the Arlington County Treasurer’s Office website.
The designs will go on display at the Founders Hall Gallery at George Mason University’s Arlington Campus (3351 N. Fairfax Drive) starting Tuesday, Dec. 15. An exhibit opening event is planned from 5:30-7 p.m.
Springfield-based Express Homebuyers sent a letter to Arlington homeowners claiming they owed real estate taxes to the county. The letter then offers to buy the recipient’s home to help pay the tax debt.
The Treasurer’s Office released the following statement about the letter Monday afternoon:
“We have recently become aware that many Arlington County homeowners have received correspondence from Jud Allen of Express Homebuyers, falsely claiming that these owners owe real estate taxes and that the County may take their homes away from them due to delinquent taxes.
Please be assured that, unless you have heard directly from the Arlington County Treasurer, you do not owe delinquent real estate taxes and there is no risk of the County taking or selling your home.
If you have any questions about this letter, or would like to report having received this letter, please call us at (703) 228-3090.”
Arlington County high school students can now submit their entries for the 2016-2017 Vehicle Decal Design Competition.
Now in its twelfth year, the annual contest is open to all students who live or go to school in Arlington.
“This contest is an opportunity to practice your design skills, as well as participate in the workings of local government,” Susan Anderson of Arlington Treasurer’s Office said in a letter to students. “It is truly a unique accomplishment for all the winners to highlight on their college applications and resumes.”
The letter also explained the winning design will be displayed on registration stickers on more than 160,000 vehicles and will become a part of a decal exhibit at the county administrative building.
Submissions are due to the Treasurer’s Office on Nov. 30 at 5 p.m, either via e-mail or a mailed CD.
Each design should be in JPEG format and have a resolution of no less than 300 DPI. Next year’s decals will have a red background with the design measuring 1.5 inches by 2.25 inches. Students must also submit an application with a short essay describing the design and why it visually represents Arlington. More detailed submission instructions are available on the county’s website.
After the submission period closes, a “Citizens Panel” will select four finalists — each will receive a cash prize — to be announced on the county’s website on Dec. 10. Residents will then vote for their favorite design online or by mailing a paper ballot to the Sun Gazette newspaper.
Voting will be open for approximately five weeks, and the winner is expected to be announced at a County Board meeting on Jan. 26, 2016.
Last year’s design contest winner was “A Nod to History” by Yorktown High School student Tommy Casey.
“In the event that you are waiting for your account to be adjusted or closed, please be sure to avoid late payment penalty by paying the balance by Oct. 5,” the county said in a statement. “Any overpayment will be refunded once your account has been adjusted.”
The county charges a personal property tax on all vehicles regularly parked overnight in Arlington, including cars, motorcycles, buses and boats.
“All cities and counties in Virginia have a personal property tax which helps fund local government,” the county said.
The Treasurer’s Office collects real estate taxes in two installments — the first is collected on July 15 and the second on Oct. 5.
“Real estate taxes support schools, fire and police protection, and other public services and benefits afforded to County residents,” the county said. “You help absorb these costs in proportion to the amount of money your property is worth.”
Residents who have questions about their bills can contact the Treasurer’s Office by emailing [email protected] or calling 703-228-4000.