NEW SCOTLAND — The new Republican tax plan has residents scrambling to prepay their 2018 property tax bills, while leaving local officials whiplashed.

“We've just been crazy with people coming in [to prepay their property tax], and we're just trying to catch up after being bombarded,” said New Scotland Town Clerk Diane Deschenes.

As of Jan. 3, Deschenes said that about $1.1 million in property taxes had been prepaid for 2018.

The new law, which was signed by President Donald Trump on Dec. 22, 2017 and went into effect on Jan.1, is considered the most sweeping change to the tax code since President Ronald Reagan’s Tax Reform Act of 1986.

The new plan eliminates taxpayers’ ability to deduct more than $10,000 in state and local taxes, known as SALT, from their federal tax returns, which could increase the tax burden of taxpayers who itemize their deductions, rather than taking the standard deduction.

Under the old tax code, filers who itemize, could deduct an unlimited amount for state and local property taxes, or deduct an unlimited amount for either their state income taxes or state sales taxes — whichever is higher.

Under the new GOP tax bill, filers who itemize their deductions will now be able to claim only up to $10,000 for SALT, income, or sales-tax deductions.

SALT deductions benefit New York taxpayers who itemize their deductions because they pay more in, among other taxes, state and local taxes than the standard deduction allows for, which under new tax law, increases the individual deduction from $6,350 to $12,000, and for joint filers from $12,700 to $24,000.

On Dec. 22, Governor Andrew Cuomo issued an executive order temporarily amending state law to allow residents to prepay their 2018 tax bill, bringing a new set of problems for residents as they tried to figure out which taxes they could pay early.

To start, those who wrote the bill knew that some taxpayers would try to pay early, so they beat them to the punch and prohibited residents from prepaying their state and local income taxes. This left only property taxes that could be paid early, but only a portion of them, and not the most costly — the school tax bill.  

On Dec. 27, the Voorheesville Central School District sent an email that said: “Following a legal review of the Executive Order, counsel for the Voorheesville Central School District has advised that the Order does not pertain to school taxes … Therefore, the School District cannot accept pre-payment of 2018-2019 school taxes.”

Since Voorheesville won’t be adopting a budget until after it is voted on in May of this year, there is no tax that can be readily levied, and therefore prepaid.

On Dec. 27, the Internal Revenue Service issued at advisory about prepaid taxes that said: “In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018 ... State or local law determines whether and when a property tax is assessed.”

The IRS was saying that some 2018 property taxes could be prepaid and fully deducted from 2017 federal income taxes only if local municipalities had already issued residents assessments before the end of 2017.

In New Scotland, Deschenes said that she had issued the tax roll and warrant for the collection of taxes on Dec. 27, and it was online by Dec. 28.

New Scotland’s total 2018 tax warrant, the public record that says what residents owe to New York State, is a little over $7.1 million; the town keeps $2.9 million, Albany County receives about $3.6 million, and about $600,000 goes to reassessed school taxes.  

So before 2018 even started, New Scotland had collected about 14 percent of its tax warrant.

Deschenes broke into laughter when she was asked if she had ever received such a large prepayment of taxes.

“Oh no, no!” she said.

“Normally, it’s just a few people who are heading to Florida, or are going be out of town — usually, it’s just a handful of people,” Deschenes said.

“It’s never been like this before,” she added.