'Throwing SALT On Our Wounds': Suffolk Officials Set Up Charitable Gift Reserve To Restore Tax Deduction

HAUPPAUGE, N.Y. (CBSNewYork) - It was billed as a tax cut, but on this tax day, April 15, many in our area are learning that tax reform has cost them more.

Suffolk County is taking action that officials there say will reverse the impact of the loss of deductions.

Tax day is especially painful on Long Island where property taxes are among the highest in the nation and no longer fully deductible. Certified professional accountants like Jay Rosner have had to deliver the bad news to many.

"The majority are paying more. It's tough," Rosner told CBS2's Carolyn Gusoff.

Islip resident Mike Sabatino used to get a sizable tax refund. This year, he owed.

"That's a $9,000 difference. Am I putting the boat in the water this year? Am I going on vacation? I don't know," he said.

"Dare I say it, Washington is throwing SALT on our wounds," said Suffolk County Legislator Kara Hahn.

In an attempt to bring back the full deductibility of SALT - state and local taxes - Suffolk County is the first in New York to launch a charitable gift reserve fund for homeowners to pay state and local taxes as a charitable contribution, making them 95 percent deductible.

"This is currently a legal mechanism that other municipalities due to alleviate tax burden, so this is something we can do under the rules today," said Suffolk County legislator Robert Calarco.

The IRS has pushed back against the tactic. Suffolk County Executive Steve Bellone believes an act of Congress is needed to disallow it. He will push for clarity before the fund accepts money, but is poised for a fight.

"If the IRS continues to fight our efforts to protect taxpayers here in Suffolk County, we will see them in court," Bellone said. "We will not stop fighting to restore these deductions."

Bellone's opponent in November, Suffolk Comptroller John Kennedy calls it "governance by gimmick" that's "already disallowed by the IRS."

What's indisputably real: The numbers and the effect on lives.

"Last year I got back $4,600. This year I paid $8,900," said Melville resident Stephen Weiss. "Everything gets cut back, and we really feel like we are being pushed to move eventually out of New York."

On Long Island, more than 500,000 homeowners - one in three tax filers - were adversely affected by the $10,000 SALT cap.