Firm hired to collect earned income tax in Plum
Plum taxpayers will send their earned income tax payments to two agencies next year.
The Plum School Board voted to hire Keystone Collections Group of Irwin to collect the district’s portion of the 2011 earned income tax, or EIT. Council has opted to remain with the local collector in the municipal authority building across the parking lot from the borough building. The workers are borough employees.
The local office currently collects the tax for both the borough and the school district.
Manager Michael Thomas said $6.25 million in current and delinquent earned income taxes is collected by the office. The borough and school district spend about $250,000 a year to operate the office. Each entity pays about $125,000.
School officials estimate the district will save about $70,000. Borough officials don’t believe the district will save any money by moving the collection to Keystone.
Keystone Collections will charge the district a fee of 1.59 percent of the total tax it collects.
“It seems like a logistical nightmare for the borough,” said Plum School Board member Loretta White, who with Rose McGuirk voted last week against moving to Keystone Collections next year.
“We need to cooperate with council. Our objectives are the same. We are public servants. We’re there to help people.”
The Southeast Tax Collection Committee earlier this year selected Keystone Collections to begin collecting the tax in 2012 under provisions of the Earned Income Tax Consolidation Act of 2008 that reduces the number of earned income tax collectors to no more than 69.
Keystone Collections had agreed to begin the process a year early for Plum if both taxing bodies — the borough and the school district — agreed to an early collection.
Plum Council last month decided to go with Keystone Collections in 2012.
Keystone Collections President Tom Kratzenberg in an Oct. 13 e-mail to Thomas said the company would not collect only one side (borough or school district) of the tax.
Kratzenberg, in the e-mail, also told Thomas that Keystone Collections needed the borough’s list of taxpayers by Oct. 15.
He had told Thomas in an Oct. 8 e-mail that Keystone Collections would collect delinquent earned income taxes for 2011 and later.
In a meeting with the school board on Oct. 20, Kratzenberg said Keystone Collections would collect one side of the tax and would collect delinquent earned income taxes for years prior to 2011.
Kratzenberg also told the board that the company could still begin the collection process as of Jan. 1 even though the borough files had not been sent to Keystone Collections.
He said after the board meeting that Keystone Collections could begin collecting earned income taxes for Plum beginning Jan. 1. He could not be reached for comment earlier this week.
Plum School District business Manager Eugene Marraccini estimated the district will save about $70,000 in having Keystone collect the tax.
“It’s commonplace (for communities) to have two collectors,” Marraccini said. “They (Keystone) said they could accommodate us.”