Most of us associate shopping with having to pay taxes, instead of getting tax relief. However, a few months ago, the town of Marlboro Township, New Jersey introduced a program that simultaneously boosts traffic at local businesses and helps shoppers enjoy a smaller annual property tax bill.
A Different Kind of Loyalty Program
Loyalty programs have been around for years, and offer consumers rewards ranging from cash to discounts on frequently purchased items. The New Jersey town's program has many similarities to these popular incentives.
Participants can sign up for free, and then receive a card to use at nearly 40 businesses. After making a purchase, they'll receive a corresponding credit for their property taxes based on how much they spend a local merchant.
Marlboro Township has a population of about 40,000 residents and so far, about 1,200 have signed up to use the program. The collective property tax savings amount for everyone who's currently participating stands at about $10,000. However, the town's mayor says that he has already saved over $200 on his own property taxes. Based on these results, a nearby town in New Jersey is thinking about creating a similar program of their own.
No Downside for Customers
Every year, hundreds of thousands of people visit accountants in an effort to reduce their tax obligation and get the maximum refund. Often, tax forms are so complicated that any applicable hourly rates represent money well spent. To supplement getting professional guidance, the program in Marlboro Township makes it easy for people to play a personal role in reducing their property taxes by doing something that comes naturally. Also, since no fees are involved, customers can feel good about supporting local businesses and getting additional benefits.
Although the New Jersey program is the first of its kind, it's possible that cities in other states might follow its lead. In Charlottesville Virginia, a program called Cardagin already rewards participants for shopping at local businesses instead of mass merchandisers. People can simply login to an application on their mobile device and get rewards ranging from free food to percentages off of clothing purchases.
Making Strategic Purchases
Beyond these emerging programs, accountants are already aware of ways to help clients get tax credits for their purchases, and these incentives are available nationwide. Although many have been available since 2006, people often aren't aware of them, especially if they decide to do their taxes without help. In essence, these credits act as deductions subtracted from the total amount of taxes that a person owes.
If a client has been considering making an upgrade to their home, an accountant might counsel them to purchase items that come with an energy efficiency tax credit. For example, upgrades to furnaces, windows and home insulation can result in a lower tax bill, provided that a shopper submits the proper documentation, and buys a model that qualifies for the credit.
Although there's a $500 cap on the amount of energy efficient credits that a person can claim, this makes a difference, especially if someone is trying to decide between buying something that's labeled as energy-efficient, and something that's not.
Reducing a tax burden is a never ending effort. Now, programs like the one in Marlboro Township, along with the federal tax credits for energy-efficient items make it easier for consumers to save, often by purchasing things they need anyway.