Bowie and Miller counties' officials cannot accept prepayment of 2018 property taxes because those amounts have not been calculated yet, officials say.
Texas and Arkansas have two different timelines in calculating and collecting property taxes. Both timelines do not coincide with some states that are currently accepting prepayment of 2018 property taxes.
With the new tax package passed by Congress and signed by President Trump, federal income taxes will begin to limit the amount of state sales tax and local property tax payments that can be deducted to a $10,000 cap beginning in 2018.
Some taxpayers want to know if a pre-payment of the 2018 property taxes before the end of 2017 allow those tax payments to be deducted without the cap.
Mike Brower, Bowie County chief property tax appraiser, said Bowie County doesn't even have a mechanism in place that would provide for pre-payments.
Brower also pointed out that the Internal Revenue Service says that payment for property taxes that have not been assessed yet will not be deductible on 2017 tax returns.
Bowie County residents don't receive their tax notices until October because the process for figuring property taxes doesn't begin until January of each year.
In Bowie County, property is appraised between January and March. Then, the land value verification process takes places from April to June each year. During this verification process, property owners can contest proposed increases of $1,000 or more.
After that, Bowie County's 29 different taxing jurisdictions, which include cities and school districts, are notified of the value of their personal, real estate and mineral property taxes in their respective areas. These jurisdictions then spend August and September conducting tax calculations for budgeting.
Next year, the 2018 tax bills can be paid from Oct. 1, 2018, to Jan. 31, 2019, without penalty.
Brower said his office has fielded quite a few calls about prepayment of 2018 property taxes.
Across the state line, the Miller County tax collector's phone has been continuously ringing with questions about property tax pre-payment, according to Miller County Tax Collector Cathy Hardin Harrison.
"We can't do it. Arkansas is not set up to do that," she said.
The number of questions prompted the Association of Arkansas Counties to issue a memo to all of the state's tax collectors explaining the reasons the state doesn't allow the property tax pre-payment.
"Arkansas law articulates that property ad valorem taxes shall be due and payable on and from the first business day in March to and including Oct. 15, and thus does not allow a provision for the pre-payment of taxes," according to the memo.
"By setting the beginning and ending date, which allows for payment, the statute does not contemplate taking payment now for taxes which will be due next year, according to the memo.
"The taxes, which will be due in 2018, have not yet been calculated. The process for arriving at these figures involves taking each parcel of real estate or personal property assessed value and multiplying it by the millage rate levy, for which Quorum Courts have until the end of December to pass by ordinance.
"The Arkansas law does not address pre-payment of taxes in the fashion outlined and as such does not provide a mechanism for collection and receipting of tax money in advance of the ad valorem taxes becoming due in March of 2018."