By Christine Sampson
As homeowners across Long Island scrambled to pay property taxes early to avoid taking a hit as a result of the federal government’s new $10,000 cap on state and local tax deductions, Sag Harbor residents learned last week they could not pay village taxes early because of the way the village’s fiscal year is structured.
“Hundreds of people” called the village office, village clerk Beth Kamper said last Thursday, ever since New York State Governor Andrew Cuomo issued an executive order allowing municipalities with fiscal years beginning on January 1 to issue 2018 tax warrants earlier than usual so that residents may prepay their taxes and deduct them on their 2017 tax returns.
But because Sag Harbor’s fiscal year begins June 1, not January 1, and approximate assessed values will not be available until sometime in February, Ms. Kamper said the village was unable to issue 2018-2019 tax warrants early.
“We have no idea what someone’s taxes are going to be for the 2018-19 fiscal year. We haven’t even started that process,” she said.
Meanwhile, in Southampton Town, Theresa Kiernan, receiver of taxes, said Tuesday the town was at least $40 million ahead of where it would normally be right now in terms of tax receipts because of the number of people paying their 2018 taxes in full before the end of 2017. She expects that number to grow because there’s still a stack of unopened mail, postmarked in December, to process.
“We were completely overwhelmed. It was probably three or four times what we’re used to at that time of year, maybe more,” Ms. Kiernan said. “We recognized at the time the federal government passed the law that we’d get a spike in activity, but when the governor made his executive order, things went crazy.”
The situation was similar in East Hampton Town, where tax receiver Rebecca Rahn estimated she received “hundreds and hundreds” of calls, messages and emails. East Hampton has received about 48 percent more in tax receipts than it did by this time in 2017 — or approximately $30 million more.
“In the middle of that we were still trying to process and do our work,” she said. “More people are paying in full, as opposed to paying just the first half.”
Sag Harbor Village treasurer Eileen Touhy said last week all 2017-2018 village taxes would have to have been paid by December 31, 2017, in order for them to be deducted on a 2017 tax return. She estimated the village had collected about 85 to 90 percent of the taxes levied on its residents, meaning there were some outstanding tax bills to be paid.
“By law [the village] cannot collect taxes without a warrant first being issued,” she said, “which is done after the budget is approved and adopted by the board of trustees.” She said its first budget meeting will be in February.
Local accountant Gregory Ferraris, a former mayor of Sag Harbor, said he wasn’t surprised to hear hundreds of people had called village hall.
Asked last week whether he would have advised people to pay their taxes early, Mr. Ferraris said, “Put it this way. It can’t hurt people to pay their town taxes now. Whether it will provide a benefit will depend on the taxpayers’ unique circumstances.”