City income tax receipts up, thanks to special programs

The city of Salem remains ahead this year in income tax receipts over last year, but with most of the increase coming from funds collected by an outside agency and from a one-time amnesty program.

“We’re up,” city Treasurer Bob Tullis said.

According to income tax receipts through June 28, the total collected for the first six months of the year totaled $2,526,138. The total collected last year for the same time period was $2,421,786 for an increase this year of $104,352 or 4.31 percent.

Both Tullis and City Income Tax Administrator Fred Pamer said the total includes the money collected from the amnesty program offered last September to taxpayers who had not filed returns with the city and should have, giving them a break on penalties and interest if they filed.

The total also includes money collected by the Central Collection Agency, through the Cleveland city income tax department, which is working to locate city residents or businesses who filed federal income tax returns but didn’t file with the city as required.

Through June for this year, the city has received $55,828 from the amnesty program and $20,893 from CCA for a total of $76,721.

Without the money from those two programs, the increase in income tax receipts this year when compared with last year would only total $27,631 or roughly 1.14 percent.

The month of July will likely reflect an increase also over last year, with Pamer and Tullis noting the city has received between $7,000 and $8,000 from CCA so far this month alone.

Pamer said they plan to continue with the CCA program as a means to find taxpayers who have not filed as scheduled and get the tax money collected. Under the agreement with CCA, the agency keeps 5 percent of what’s collected and collects not only the taxes owed, but also the penalty fee and interest on the city’s behalf.

The amnesty program was closed after a month and a half, but collections of money from the arrangements made continue to come into the city income tax coffers.

“The benefits of the amnesty program are going to stretch on for awhile,” he said.

People who were late or had not filed were able to file as taxpayers with no penalty assessed and only half the interest assessed on the tax they owed. It was a one-time only option.

“These two programs have been a benefit to the city. We’ll see future benefits from both of them because we’ve added taxpayers for future years,” Pamer said.

Last year, the city received $51,964 from the amnesty program.