Apr 18 2012
State Tax Board Backs Down on Property Tax Deduction Limits
School Parcel Tax Deductions May Be OK-
In a sudden about-face, on Friday, April 13, the California State Franchise Tax Board removed its website page advising California taxpayers they must limit their property tax deductions.
The retracted tax guidance had advised California taxpayers to limit their deductions to “ad-valorem” property taxes, with limited exceptions. For Piedmonters who followed the FTB guidance, this meant not deducting school parcel taxes, which average more than $3,000 per parcel in Piedmont. Further details to be posted soon. See revised FTB guidance webpage.
The response letter from the IRS Chief Counsel (2012-0018) states taxes other than ad valorem may be deductible if levied “at a like rate against all real property . . .” Piedmont’s parcel taxes are levied on parcel size, creating what are different rates. Perhaps an in town tax professional or city staff should review how our taxes are levied, should this be an issue?