Carbon County's municipalities and school districts will receive a share of a $75,000 settlement.
During a recent meeting of the Carbon County Tax Collection Committee, which is comprised of representatives from every municipality and school district in the county, the board voted to accept the settlement offer from Travelers Casualty and Surety Company of America, the insurance company handling all bond claims against Central Tax Bureau of Pennsylvania, former earned income tax collector.
Centax was removed as the EIT collector by a number of counties last year after it failed to process and distribute earned income taxes. The company has since become defunct.
Attorney Keith Strohl of the Law Offices of Steckel and Stopp, updated the board, stating that the settlement offer was about 60 percent of what the estimated damages would have been.
He noted that he felt the offer was $15,000 above what the committee determined as the lowest amount it would accept.
Under the terms of the settlement, the committee also releases Travelers from any past, present and future debts and obligations related to Carbon County's tax collection agreement with Centax effective June 6, 2011.
The settlement excludes one claim by Weatherly borough, which claims there is missing or unpaid earned income tax receipts for tax year 2012. The issue is being pursued by James Nanovic, borough solicitor, and is in the approximate amount of $60,000.
After some discussion, the board voted to accept the settlement.
Committee members then voted to distribute the money back to the municipalities and school districts according to the weighted vote set up by the state.
The breakdown of the EIT collector appointed by the Carbon County Tax Collection Committee; as well as a number of other Pennsylvania counties began in late June 2012.
In July 2012, the tax collection committee voted to terminate its contract with Centax as the EIT collector. They then voted to hire Berkheimer and Associates of Bangor as the interim EIT collector.
In September 2012, Strohl updated the group on the claim against Centax's bond.
During that meeting, he told representatives that Centax's bond holder, Travelers, is investigating everything and asked all municipalities and school districts to gather information on any economic damage they suffered as a result of Centax's failure to make payments in a timely manner.
Since then, the committee has been collecting and updating information needed for the claim; and Berkheimer has been sorting out all documents that Centax held.
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.
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.