A senior judge from Monroe County has issued an order in the tax dispute case between Carbon County and the Panther Valley School District which favors the county.
In a four-page order, Judge Jerome P. Cheslock has ruled that the district must turn over all tax records, dating back to 2001, to the county and pay a 5 percent commission and other fees. The judge also ordered that the county is entitled to be reimbursed for costs incurred in the suit, plus all legal fees incurred by the county must be paid by the school district.
The decision could cost the district over $250,000 in tax revenues.
The costs incurred by the county in the suit could reach over $70,000 for an audit done and legal fees would be added to those costs.
The county sued the school district in November, 2009 over delinquent tax files that were never given to the county tax claim bureau as required by law. The suit was based on a ruling in a Monroe County lawsuit filed against the East Stroudsburg School District. In that case the court ruled that tax records and returns are to be filed with the county tax claim bureau.
Carbon claimed that the school district has been withholding delinquent tax collection records and instructed its elected tax collectors to withhold the information from the county.
The suit also charged the school district hired a private law firm, Portnoff Law Associates, of Norristown, Montgomery County, to collect delinquent taxes.
In his order Cheslock issued eight directives the district, its tax collectors, and Portnoff must do, or it must supply to the county the records it wants.
Cheslock ruled that "Defendant Panther Valley School District shall immediately relinquish to the Carbon County Tax Claim Bureau all as yet unrelinquished original annual returns, books, tax duplicates, data and elected Tax Collector records for the tax years 2000 through and including 2011, which remain in the possession or control of Defendants, Intervenor, and/or their attorneys."
Cheslock also ordered the school district and Portnoff to make a complete electronic disclosure to the tax bureau on the status of all real estate taxes in the district for the same years, with a description and tax parcel number of the property against which such taxes were levied.
Cheslock also ruled "all taxes for which returns have been made to the Carbon County Tax Claim Bureau shall be payable only to the Carbon County Tax Claim Bureau." He adds, "All such taxes shall be payable only to" the tax claim bureau, and "shall not be payable to, received by, or accepted by" the school district or Portnoff.
Cheslock also ruled any delinquent school tax payments that were mailed to the district or Portnoff must be endorsed and turned over to the county tax claim bureau within two days of their receipt.
The court also ruled that the county tax claim bureau is entitled to a 5 percent commission on all delinquent taxes collected by or on behalf of the school district and Portnoff, for the tax years 2000 through and including 2011, "and for all subsequent years in which Defendant engaged in collection pursuant to the Municipal Claims and Tax Liens Act."
Cheslock also ruled the tax claim bureau is "entitled to withhold all past due commissions from current receipts of delinquent taxes until the 5 percent commission is paid in full."
At a hearing in May the district told the court that it had been complying with the requests for records since the suit was filed. Cheslock makes note of that fact in the order by stating, "For purposes of calculating the 5 percent commission, the Carbon County Tax Claim Bureau shall give Defendants full credit for all commissions paid commencing in August 2008."
The district and Portnoff have a right to appeal Cheslock's order to a state court.