Newtown's Local Services Tax Collector To Switch Hands
The Central Tax Bureau of Pennsylvania, Inc., is unable to live up to its contractual agreements, including Newtown Township's one-year agreement to collect local services tax.
NEWTOWN SQUARE–Due to a change of ownership, or bad management, or a problem with their computer system, or a combination of all of those things, the Central Tax Bureau of PA, Inc. (CenTax), was unable to live up to its contractual agreements to any of the taxing authorities in Delaware County, including Newtown Township, or across the state of Pennsylvania, said Newtown Township Solicitor Rich Sokorai at Monday night's meeting.
The county, who had a five-year agreement with CenTax may face bigger problems than Newtown, according to Sokorai. Newtown had a one-year contract with CenTax and were looking at it as a trial basis.
CenTax was officially hired this year with a one-year contract to collect the $52 local services tax from each employee in Newtown township. According to Sokorai, no money is reported missing at CenTax but significant delays in distributing the money to its contracted municipalities have been reported.
According to Sokorai, CenTax had called its bonding company, Traveler's Insurance Company, who helped perform an audit to determine all the money was indeed there. Traveler's then called Berkheimer Associates, a similar company like CenTax, to help expedite the distribution of money from worker's paycheck sto municipalities.
"The bottom line to us is that they said, 'We will do it for the same amount of cost to the township, at least until the end of this year,' which was what CenTax was obligated to do with us," said Sokorai.
"I don't know how CenTax is going to survive this thing or at all," added Sokorai. "Berkheimer has a team of people right now at the CenTax offices. They're going to get the money that's sitting there, collect it, and they're going to get all that to us, gather it up, reconcile, and start the flow of money to us."
Last November, supervisors voted 3-1–with Supervisor George Wood abstaining from the vote as he noted he was related to the vice president of the CenTax and Houldin holding the lone nay–to approve the hiring of CenTax as their tax collector.
Michael Hill, vice president of CenTax, previously noted at that meeting that a charge of 1.65 percent of the township's net collections will be made when hired. The township currently collects roughtly $470,000 in local services tax, in which Hill said in the first year he would expect a "bump" in collections.