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Perry County Tax Collection Committee Act 32

Perry County Tax Collection Committee Act 32. Act 32. New law which overhauls earned income tax in Pennsylvania – signed into law on July 2, 2008 Will affect taxpayers, employers, PSD, tax collectors Applies to every county except Philadelphia Reduces number of collectors from 560+ to 69

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Perry County Tax Collection Committee Act 32

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  1. Perry County Tax Collection CommitteeAct 32

  2. Act 32 • New law which overhauls earned income tax in Pennsylvania – signed into law on July 2, 2008 • Will affect taxpayers, employers, PSD, tax collectors • Applies to every county except Philadelphia • Reduces number of collectors from 560+ to 69 • One tax collector per each Tax Collection District

  3. Perry County Tax Collection District (TCD) • All of Perry County; Greenwood Twp. (Juniata County); Reed Twp. (Dauphin County) • 36 members of TCC • 4 School Districts 32 municipalities • All members currently have their taxes collected by CTCB

  4. New Government Entity – TCC • Perry County TCC is a new government entity • TCC governs and oversees how earned income taxes are collected in Perry County TCD • Requires immediate school district and municipality attention – now; not later! • TCC process • TCC first stage: 2+ years – 2009-11 – TCC organization and basic tax collection decisions • TCC second stage: forever – oversight of ongoing tax collection

  5. NOW Taxing authorities should begin advance planning for TCC – now: Form planning group Collect/summarize tax facts Governance/first meeting/chairperson selection/other initial decisions Taxing authorities should appoint TCC voting delegates and alternates – now – Delegate need not be elected official and need not be appointed official – this must be done by 9/15/09 – must convey this information to County Commissioners Suggestion: Appoint same person as TCC delegate who is delegate to CTCB board (they have working knowledge of tax and are used to dealing with a large group) Every PSD must select one delegate to TCC but more than one PSD can have same delegate (this will reduce number of delegates on TCC and will increaseefficiency) TCC Advance Planning

  6. Must take place by November 15, 2009 – but can be before It is the responsibility of the county commissioners to organize the time, place and location of the first meeting – must notify PSDs by 9/15/09 of when first meeting will occur and must give public notice 21 days before first meeting County commissioners run the first meeting until a TCC chairperson is elected; this should be your first vote Once chairperson is elected; county commissioners role is finished; chairperson now runs the meeting Weighted vote is default vote First vote should be to determine chairperson and this should be discussed early (50% based on population; 50% based on revenue – this will be distributed by DCED by 9/1/09) TCC initial meeting

  7. October/ November 2009 (November 15 deadline for first meeting) TCC first meeting County Commissioner Chair or designee convene meeting – no official further County role after officer election Must elect Chairperson, Vice Chairperson, Secretary, Open Records Officer (and possibly other officers) Should appoint legal counsel Should advertise Adopt bylaws – if possible based on advance planning – TCC First StageTCC First Stage – Year #1 – 2009/2010

  8. After officer election and bylaw adoption/ before tax collector appointment TCC takes the following steps: TCC management structure decisions Collection method Independent third party For Profit collectors Tax collection bureau Create a Perry County Tax Collection Bureau Multi County Collection Independent third party Tax collection bureau TCC finance decisions TCC auditor TCC bank TCC budget – operating costs TCC operating cost financing mechanism – TCC tax collection cost allocation plan – TCC First Stage

  9. June 1, 2010 Deadline to appoint tax appeal board Appoint new tax appeal board – made up of 3 or more TCC delegates Appoint mediator Adopt mandatory and other policies Right-to-Know records policy – appoint Open Records Officer (priority 2009) Investment policy Tax records policy Tax collector investment income distribution policy Tax collector unidentified funds rules Regulations, policies, and procedures for tax administration TCC First Stage

  10. Sept 15, 2010 Deadline to appoint new Act 32 tax collector critical date If tax will be collected by independent third party tax collector, prepare tax collector RFP and conduct RFP process Formal written Act 32 Tax Collection Agreement provisions are very important and should be included in RFP Decision on whether to accelerate new tax collector appointment and universal non-resident withholding requirement to 01/01/11 instead of 01/01/12 TCC First Stage

  11. Duties of TCC • Maintain a record of all votes and actions taken by the TCC. • Appoint and oversee the Tax Officer. • Set the compensation of the Tax Officer. • Require, set, hold and review the tax officer’s bond. • Establish the method of financing for the TCC. • Adopt, amend, and repeal bylaws for the management of its affairs. • Adopt, amend, and repeal policies and procedures consistent with regulations under the Act. • This is the same thing that the CTCB board does now

  12. Applicable Statutes • Act 32 • Ethics Act • State Adverse Interest Act • Sunshine Law • Right-to-Know Law

  13. TCC Finance – Operating Costs • No TCC expense payments until budget adopted (unless paid by one or more taxing authorities, or County – with expectation of TCC reimbursement) • TCC will have operating costs – separate from EIT collection cost • Estimates from DCED: $125-$150K • Who pays for this: You do! • Such operating costs to be shared by the SDs and munis within the TCD in proportion to EIT revenue (different from weighted voting – population not considered)

  14. January 1, 2012 Act 32 county-wide collection begins (unless accelerated) Act 32 income tax law changes effective Second stage of TCC responsibilities begins, involving oversight of county-wide tax collection arrangements and periodic decisionmaking on continuing or changing arrangements TCC = oversight organization (or bureau) TCC Second StageTCC Second Stage – 2012 and Future Years

  15. Perry County Act 32 Tax Planning Committee – 8/5/09

  16. TCC Planning Group Steps • Who is the leader? How get started? • Members of planning group? • SD officials or business administrators • Local municipal officials or managers • Identify other interested parties • Sunshine Law/Right-to-Know Law?

  17. TCC Planning Group Steps • How proceed? • Organization meeting • Planning group composition • TCC Legal Overview and Timeline • Resources needed • Subsequent meetings • Authorize letter to taxing authorities • Act 32 required steps • Urge delegate appointment

  18. TCC Planning Group Steps • County dialogue, including establishing time and place for TCC first meeting • Develop proposed TCC meeting agendas • Set planning group meetings to address TCC issues • Prioritize TCC issues/assign responsibility • Develop proposed TCC bylaws • Develop proposed TCC budget • Legal counsel • Funding mechanism for costs incurred before TCC first meeting • Develop proposed TCC Right-to-Know Law Request Policy • Conduct outreach programs – taxing authorities and business community

  19. TCC Bylaws

  20. TCC Bylaws • Bylaws = critical document – address ASAP • CTCB has Act 32 bylaws ready to go and will provide them free of charge • Governing body – representatives of every school district and municipality within TCC that levies EIT • Mini United Nations – 36 Delegates • 4 SDs/32 munis = 36 possible delegates • PA Senate – 50 Senators • Weighted voting – based 50% on EIT revenue and 50% on population • Option to change statutory default rules

  21. TCC Bylaws • Major decisions first; then drafting and details • Major bylaw decisions: • Overarching – how to streamline governance? • Delegate number: How many voting delegates should there be? Should number of delegates be reduced to streamline governance? Note: TCC first meeting requires delegate appointed separately by every TA (but multiple TAs may appoint same person). • Vote weight: Should there be weighted voting based on tax revenues and population? Alternatively, should each delegate have just one vote? Note: TCC must use weighted voting until bylaws adopted.

  22. TCC Structure • Management committee: Should TCC have a management committee? If so, what duties should be delegated to the management committee? • Employees: Will TCC have Executive Director or other employees? • Vote required for action: What vote is required for decisions? Simple majority of those present? Majority of all delegates? Supermajority for certain major decisions? • Many other decisions

  23. CTCB role in Perry County TCC • We already collect for 100% of Perry County • Historically, our rate has been between 0.5 and 0.6% • If the TCC votes to retain CTCB, the bureau could absorb the costs of the TCC • We already have bylaws, solicitor, auditors, director • This can save the TCC unnecessary expenses

  24. CTCB role in Perry County TCC - Technology • CTCB prints all of its forms in house • CTCB offers online filing for taxpayers • In 2010, CTCB will offer online filing for employers • New website – tax forms available online • New mailing and emailing software to reduce costs • Experienced staff in place and ready to go

  25. CTCB role in Perry County TCC – Other services • Act 32 only applies to Earned Income Tax • CTCB can also collect Local Services Tax (LST), real estate tax (both for school district and for county), OAT, OPT, personal tax • Can also collect bills (trash, sewer, utility, etc.) • Can print forms for members at cost • Can be a one stop shop for all taxes in Perry County (similar to Lancaster Bureau)

  26. CTCB Role in Perry County • The longer it takes for TCC to decide collector, the more expensive it is for you! • If you elect CTCB to be the collector at your first meeting, CTCB then absorbs all the costs associated with CTCB because TCC becomes the Board of Directors of CTCB

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