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Panel takes new look at RITA tax collection

SALEM

SALEM — City council’s Finance Committee listened to a presentation about the Regional Income Tax Agency known as RITA Tuesday night and asked questions about the service, but made no decision, instead requesting an updated cost quote.

This wasn’t the first presentation by RITA, which is a regional council of governments agency headquartered in Brecksville near Cleveland, but many of the council members weren’t on council then, either. According to Mark Taranto, manager of RITA Member Services, the projected cost for RITA to handle income tax services for the city in 2017 was $134,249, which he estimated was a savings of $20,000 to $30,000 from what the city paid out for the city income tax department at $161,000. Taranto said RITA’s costs are actually projected to go down in 2019.

When asked what would happen to the city’s income tax department if council decided to go with RITA, Councilman Andrew Null, who chairs the Finance Committee, said that’s something that would have to be addressed, but he felt it was premature to discuss that at this point. During the council meeting that followed, he actually gave a shout-out to the income tax department, saying they did a great job on tax day Monday, just as they do every year, acknowledging he was one of those last-minute filers who had to stand in line.

City Treasurer K. Bret Apple, who was accompanied by city Income Tax Administrator Fred Pamer, listened to the presentation, but deferred making comment at this time.

Several neighboring communities use RITA for their income tax service and collection, including Leetonia, Washingtonville, East Palestine, New Waterford, Salineville, Wellsville and Sebring. Columbiana is joining this year. RITA serves 310 communities in over 70 counties in Ohio, covering 40 percent of Ohio communities that have an income tax. There’s a walk-in branch office in Youngstown, roughly a 30-minute drive from Salem, or taxpayers can call by phone and talk to a live person or use the automated phone line, or they can go online and use E-file or Fast File. Tax payments can also be made online and throughout the year.

Taranto said during tax time, RITA expanded hours for the call center and hosted regional events in new areas and hosts the events annually for some communities if there’s a need. RITA won’t have a need for any office space in Salem, he said.

He said the city would have access to all the tax records for the city, could receive projections on income tax collections and be represented in various state organizations, such as the Municipal League. Contractor registration would be done and he said they have a whole department whose purpose is to track down new taxpayers. They also have programs for non-filers and non-payers and even payment programs for taxpayers. They also have a collection department. For attendance at small claims or civil action court hearings, there’s a small extra charge and for outside attorneys and post judgment collections, there’s an 18 percent rate and a cost of $8 per administrative subpoena.

Councilwoman Cyndi Baronzzi Dickey, who was in the audience, asked how much the collection agency charges that’s currently used by the city and was told 10 percent. Apple said the cost can be passed on to the taxpayer.

City Auditor Betty Brothers asked how RITA handles refunds and Taranto said the city would be kept informed of any refunds and RITA would pay them. She also asked about keeping track of new people in the city, noting that when someone signs up for water, they also have to come to the income tax department. He said utilities could provide them with that information. He also said they cross-reference W-2s from employers with where people live to ensure they’re paying.

Councilman Geoff Goll, who serves on the Finance Committee, asked about how quick the city would get it’s income tax money. Taranto said if the city started in January, money would be transferred to the city the next month, then every 15 days after that, but the city would also have the option to get an advance if it became necessary.

Some of the statistics he shared included 4,000 calls handled on Monday with a wait of no more than 5 minutes, 222,000 calls handled all of last year, collected $24 million through payment plans or settlements in 2018 and identified $30 million in unfiled liabilities and collected close to $9 million of that.

To learn more about RITA, visit www.ritaohio.com

mgreier@salemnews.net

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