The Carbon County Tax Collection Committee has filed a claim against a bond owned by Central Tax Bureau of Pennsylvania Inc. (Centax) of Bridgeville for failure to complete its contracted tasks.
In July, the committee voted to terminate its contract with Centax as the county's earned income tax collector because it failed to process and distribute earned income taxes to municipalities and school districts.
During the group's meeting last week, Keith Strohl, the committee's solicitor, updated the board on the claim against Centax's bond.
He noted that the bond holder, Travelers, is still investigating everything that has gone on at Centax; adding that Centax and interim EIT collector Berkheimer and Associates of Bangor, are working to make sure the transition is completed properly.
Strohl told representatives from each municipality and school district that if they have suffered any economic damage as a result of Centax's failure to make payments in a timely manner, he needs that information as soon as possible. He provided an example of economic damage as anything the municipality had to pay such as late fees or interest, because lack of payments from Centax caused the municipality to not be able to pay bills.
Once information is received from the municipalities, Strohl will add them onto the current bond claim already opened on behalf of the Carbon County Tax Collection Committee.
Strohl also notified the board that he received correspondence from the solicitor of the Northampton Tax Collection Committee, informing him that the committee is putting him on notice that they may pursue a claim against Centax and the Carbon County Tax Collection Committee if any municipality in the Northampton Tax Collection district suffered economic damage as a result of Carbon's EIT collector.
"If the neighboring counties have a lot of residents that work here or vice versa, and EIT taxes were paid from employers to Centax then it could create a problem," he said, adding that all tax collection committees who utilized Centax or neighboring counties that suffered economic damage as a result were instructed to make claims on the bond, but if the bond limit is exceeded or Centax goes bankrupt, then Carbon Tax Collection Committee may be defending claims against other tax collection districts.
Centax was hired as the countywide EIT 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.
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.