Tax collection efforts net over $100K

Since last fall, the city has gained more than $100,000 in income tax receipts from an income tax amnesty program and an outside collection agency.

City Treasurer Bob Tullis recently updated city council members on the success of both programs, noting that most of the taxpayers identified will now remain on the books, continuing to increase income tax receipts.

The amnesty program was launched last September to coax errant taxpayers or those who should have been paying taxes and didn’t into filing their returns and getting a break with no penalty and only half the interest assessed on the tax owed.

After the window closed on the amnesty program, the city launched its agreement with the Central Collection Agency, through the Cleveland city income tax department, to locate city residents or businesses who filed federal income tax returns but didn’t file with the city as they should have.

Under the collection agreement, CCA keeps 5 percent and collects not only the tax owed, but also the penalty fee and interest on behalf of the city of Salem.

In 2012, Tullis reported the city received $51,964 through the amnesty program. So far through March 31, the amount for this year is $37,040, for a combined total of $89,005.

Money from CCA started to trickle in this spring, with $926 in March and $11,278 so far in April for total of $12,204. Of that total, Tullis said the amount owed for taxes was $6,652, with the rest coming from penalties and interest.

During the presentation, Councilman Dave Nestic asked if the money collected through the programs in 2013 was included in the total tax receipts and Tullis said it was.

After being contacted, city Income Tax Administrator Fred Pamer explained that the city’s income tax receipts through March this year were about 5 percent over the total reported at his time last year, but if the amount from the programs was taken out, the income tax collection difference from 2012 to 2013 fell to less than 1 percent.

He reported the amount of income tax receipts at the end of March 2012 was $1,005,560. The amount at the end of March 2013 was $1,064,342, showing an increase of $58,781 or 5.85 percent. Subtracting out the $49,245 received in 2013 from the amnesty program and CCA, the percentage is less than a 1 percent increase, but Pamer said it’s still an increase over last year.

“We’re holding steady,” he said.

As for the expected gain from having more taxpayers identified, both he and Tullis said the amount of taxes gained in future years from those taxpayers won’t be as much since the amounts collected through the programs may represent multiple years, penalties and interest.

Mary Ann Greier can be reached at