February 24,2018
the staff of the Ridgewood blog
Ridgewood NJ, New Jersey Democrats push “Hail Mary” saying that they will be moving ahead with a legally-dubious plan to let residents make charitable contributions in lieu of property taxes, promising to vote on the bill in the state Senate on Monday and threatening to take the fight to court if necessary.
The bill (S1893) is designed to be a workaround to the new federal tax law that capped the state and local tax deduction at $10,000, a move that Democrats say will harm high-tax states like New Jersey, which has the highest property taxes in the nation. Average property taxes in Bergen County in 2017 were $11,564 . The new Federal rules allow deductions of up to $10,000 . The $10,000 limit on deductions is for state and local taxes and will take effect in 2018. That $10,000 limit combines both local property and income taxes.
The legislation would effectively allow homeowners to keep deducting their property taxes by calling those payments charitable deductions. Under the bill, local governments would be permitted to set up charitable funds for specific public purposes—from police to parks—that residents could pay into and get a credit of up to 90 percent toward their property tax bills. Those contributions could then be written off as charitable deductions on federal tax bills, officials said. It’s unclear whether the plan withstands legal and IRS scrutiny.
