shortcutJun 24, 2018
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Executive Order Does Not Allow for Early Payment of 2018-2019 School District Taxes

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act, which included several revisions to the Internal Revenue Code. The new law caps the allowable deduction for State and local income, sales and property taxes at $10,000, beginning in 2018.

Governor Andrew Cuomo subsequently signed an Executive Order designed to assist taxpayers pre-pay their 2018 property taxes before December 31, 2017 in order to potentially claim the deduction before the new federal tax law goes into effect. The Order, and initial comments that the Governor made about it, have raised questions about whether or not school districts can accept early payments for taxes that will be levied during the 2018-2019 school year.

While the Governor’s Executive Order may, in some cases, allow residents to pre-pay their 2018 municipal (e.g. town, county or city) property taxes, there is no legal nor practical mechanism for pre-payment of school taxes by the December 31st deadline. Most municipal property taxes are calculated on a calendar year, from January 1 through December 31. AS such, municipalities may be in a position to issue tax warrants a few weeks early. However, the Schalmont Central School District operates on a July 1 through June 30 tax year and therefore has no mechanism to issue tax warrants in December for a budget that has yet to be developed and put before voters in May.

So, in short, the Executive Order does not in any way provide authority for school districts to adopt estimated or partial tax warrants for the 2018-2019 school year or to issue tax bills corresponding to those warrants. Further, the Order “does not address the prepayment of school taxes and does not change the statutory process by which taxes are levied by schools.”

The district is required to follow its standard budgeting and tax levying process and so will not adopt a budget and tax levy until the May school budget vote.