Bill Would Allow Deduction of All Property Taxes Paid from State Income Tax
Senator Declan O’Scanlon and Senator Joe Pennacchio re-introduced legislation that would provide relief for New Jersey’s over-burdened property taxpayers.
Senator Declan O’Scanlon and Senator Joe Pennacchio re-introduced legislation that would eliminate the current $15,000 cap and allow taxpayers to deduct the entire amount of property taxes paid on their income tax. (Pixabay)
The bill, S-2279, would allow taxpayers to deduct from state income tax the entire amount of property taxes paid on their principal residence, eliminating the current $15,000 cap.
“When New Jersey residents complain about the state being too expensive, they are often referring to our exorbitant property taxes,” said Senator O’Scanlon (R-13). “There are plenty of other taxes adding to the burden on taxpayers, but it is property taxes, the No. 1 highest property taxes in the nation, that pack the strongest punch. There’s absolutely no justification for stopping families from deducting every last cent from their income taxes.
“There has been a rallying cry in Washington to reinstate the federal cap on the SALT (state and local tax) deduction, yet New Jersey continues to cap what homeowners can deduct on an unfair and burdensome tax,” O’Scanlon added.
A national study conducted by WalletHub last year revealed that the property taxes on a median value home in New Jersey were $2,500 more than the next highest state.
In 20 years, the average property tax bill in the state has almost doubled, from $4,972 in 2002 to $9,284 in 2021.
“For property owners who pay in excess of $15,000 each year, the cap has the effect of a tax on a tax,” said Senator Pennacchio, who sponsored legislation signed into law in 2018 raising the cap from $10,000 to its current level. “They pay their property taxes, then they have to turn around and pay income tax on the same money. Enough already.
“People need a break. In this state, especially under this Governor, residents are constantly being bombarded with new taxes or new ways for the government to grab their hard-earned money,” Pennacchio continued. “Eliminating the cap will provide some rare relief come tax time each spring.”
Under the O’Scanlon/Pennacchio bill, the cap for renters, who can deduct “rent constituting property tax” of 18 percent of rent paid, would also be uncapped.