the municipal secretary desktop reference manual - Southwestern ...

These self-assessing and reporting characteristics makes these types of tax levies most susceptible to
the not uncommon practices of taxpayers either under-reporting or not reporting their actual tax
liabilities. Under-reporting or non-reporting of tax liabilities have two impactsCthey reduce yields
and play havoc with the concepts of horizontal equity, since equals are not being treated equally.
To address these issues, jurisdiction should adopt tax verification programs and require collections of
Act 511 taxes to enforce them. These are activities requiring audits of taxpayers' records to
substantiate their tax liabilities and tax payments.
5. Interest and penalty charges on taxes and fees comply with law, or are adequate to
encourage prompt payment.
Commentary
The legislative body should periodically review the state law concerning the interest and penalty
which may be applied to delinquent tax and fee payments. Not only should local governments
authorize the charge of the maximum allowable interest and penalty values on overdue accounts, it
should institute policies against the waiver of such charges without the legislative body's formal
authorization.
6. The municipality periodically analyzes tax delinquencies and has a program in place
which aggressively attempts to collect these delinquent taxes.
Commentary
With an effective program, a municipality should be able to collect about 95-98 percent of its real
property taxes and greatly improve the collection of non-property taxes. Delinquent tax accounts
should be turned over to the delinquent tax collector on a timely basis. The municipality should
expect the delinquent tax collector to vigorously pursue overdue accounts and use whatever means
inclusive of property liens, and pay attachment and magisterial actions. Sheriff sales of chronically
delinquent properties or for those which have reached a delinquency of a predetermined minimum
value should be authorized by the legislative body.
7. Where fees and service charges have been established, they are adequate to recoup all
direct and indirect costs of providing these services, unless there are specific policies
calling for the jurisdiction to subsidize various services which are paid by fees from tax
revenues.
Commentary
In those instances where there are no policies requiring the subsidization of services which are feed,
municipalities should strive to set a fee schedule that encompasses all of the personnel, contractual
and materials/supplies costs and indirect costs dealing with overhead, depreciation and return on
investment charges related to the provision of the service.
A-26