Central Tax Bureau of Pennsylvania Inc. (Centax) of Bridgeville, the firm hired by the Carbon County Tax Collection Committee as the county's earned income tax collector, has been fired because of failure to process and distribute earned income taxes to municipalities and school districts.
During a special meeting of the Carbon County Tax Collection Committee recently, the committee voted unanimously to terminate Centax's contract as the countywide tax collector, effective immediately. The committee then voted to name Berkheimer and Associates of Bangor as the committee's interim tax collector, pending a final contract.
William Schwab, chairman of the county tax collection committee, said via email that the decision to terminate Centax stemmed from delays municipalities and school districts in the county were experiencing when receiving taxes collected, because Centax was having problems processing the earned income taxes; as well as failing to complete mandatory reports.
Centax was hired as the countywide tax collector on Sept. 15, 2010, after the county tax collection committee determined that Centax would meet its needs under Act 32, which requires a single tax collector to handle earned income taxes collected. Three other tax collection companies Berkheimer and Associates, Capital Tax Collection Bureau of Harrisburg, and JP Harris Association of Mechanicsburg also submitted proposals to the committee in 2010.
Schwab noted that Centax representatives were invited to the special meeting of the committee to answer questions from committee solicitor Keith Strohl.
Strohl, who is an associate with the Law Offices of Steckel and Stopp in Slatington, wrote to Centax on July 11, outlining his concerns.
In the letter, Strohl provided section 9 of the Tax Collection Agreement, dated June 6, 2011, which outlines the intent to terminate "for certain violations of the agreement."
Reasons for termination included "Centax it is believed has several legal proceedings or investigations by government bodies, namely other area tax collection committees ... Municipalities and school districts whom are members of the Carbon County Tax Collection Committee have reported that payments or distributions are not being provided to them on a timely basis ... and Monthly reports have not been furnished for the past two months to the taxing authorities in compliance with both the tax collection agreement and also the Local Tax Enabling Act.
"It is believed after limited conversations with representatives from the taxing authorities that there are possibly other violations, breaches or causes for early termination which may have already occurred."
Schwab said that under the action to hire Berkheimer and Associates as the interim collector, the new tax collector will collect the taxes for the time that remained in Centax's contract.
He added that the committee also authorized Strohl to make a claim on Centax's bond because there will be a loss of funds to the municipalities in the amount of approximately $125,000.
Carbon is one of at least 10 Pennsylvania counties that hired Centax as its earned income tax collector, in accordance with Act 32.
Neighboring Schuylkill County, who also hired Centax in 2010, terminated its contract with the firm and hired Berkheimer to replace them in late June.
The Carbon County Tax Collection Committee was formed in October 2009 because of Act 32 of 2008, which amends the Local Tax Enabling Act.
Under Act 32, counties were required to form a countywide collection committee, comprised of delegates from each municipality and school district within the county; and hire one tax collector who would be responsible for the collection of earned income tax.
The law states that this reduction in the amount of earned income tax collectors would provide for quicker money turnarounds, which means municipalities and school districts should get paid sooner.
The Carbon County Tax Collection Committee members include delegates from Jim Thorpe, Kidder Township, Penn Forest Township, East Penn Township, Franklin Township, Lehighton, Mahoning Township, Parryville, Weissport, Bowmanstown, Lower Towamensing Township, Palmerton, Towamensing Township, Lansford, Nesquehoning, Summit Hill, Coaldale, East Side, Lausanne Township, Lehigh Township, Packer Township, and Weatherly; as well as Jim Thorpe, Lehighton, Palmerton, Panther Valley and Weatherly school districts.