New tax law triggers prepay rush at local tax offices

The end of December at the Travis County Tax Office is usually a busy time, but this week the staff got slammed.

"We were inundated, the lines were very long, the drive through lines and lines in our lobby, everybody wanted to get the answer that we were having trouble getting,” said Travis Country Assessor – Collector, Bruce Elfant.

The question involved a popular tax deduction. "Whether they'd be able to pre-pay their 2018 taxes and still be able to receive the tax break,” said Elfant.

Several hundred people didn’t wait for an answer and mailed in their payments.

The checks that have been processed over the past two days total more than $4 million. Three letters provided to FOX 7 are typical of what came in.

One resident wrote that he was sending $20,000 to prepay his property tax bill for 2018 and 2019. Another wrote that he was making a partial payment, forced by the newly passed federal tax law.

James Walker, who came in person, said his protest will be at the ballot box.

"What can I do about it, I'll think about it when I go and vote, I won’t forget,” said Walker.

Currently, for most property owners, every penny paid in local property tax can be deducted when filing with the IRS. But the new tax law signed by President Trump last week will cap the deduction at $10,000 in 2018.

In an advisory issued Wednesday by the IRS, property owners can claim a 2018 property tax payment. In 2017 however, only if the property was assessed this year.

Otherwise - you have to wait. Officials at the Travis Central Appraisal District tell FOX 7 that property evaluations began a few weeks ago, but they do not start calculating and posting assessments until next month.

That means no loophole for Travis County residents.

After the ruling was announced, some wanted the county to send their checks back to them. But that, according to Elfant, isn’t an option. Filing for a refund is an option, or the money can be left in an escrow account.

It’s an interest bearing account, but there is a catch. "The interest according to state law goes to the General Fund ... the County General Fund,” said Elfant.

It’s not a lot of money, but in theory, enough to fill a few pot holes. Then there's also the possibility that IRS rule makers will have a change of heart; that’s what James Walker is hoping for.

"I have to pay them eventually,” said Walker.

Officials in Williamson County issued a statement that pre-payments for 2018 will not be accepted at their tax offices.