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1 Thanks for Joining Us! Listen to audio over your computer speakers. If you are not able to listen via the Internet, you can dial-in by phone using the numbers shown on your screen. If you disconnect, simply repeat instructions to reconnect to the program. If listening to audio by phone, you can adjust the volume by pressing *4. To submit a question, type in the chat window and click Enter to send. CPE and CEU Credits are NOT available for this forum.

2 Welcome to FYI Our Intent and Purpose Strategic Plan Outreach and Mentorship Effort for New and Newer PASBO Members in all aspects of School Business Management Use PASBO Experts to Help New Entrants Wayne McCullough and Jeff Ammerman 2

3 Today s Agenda I. What's Due Calendar of State and Federal Reports II. III. PASBO Tools You Can Use Real Estate Tax Collection IV. Your Questions Answered An Open Forum for Your Questions About Topics Covered and Uncovered! 3

4 What s Due 31-Jan 31-Jan Federal Income Tax - W-2's Annual Report of Local Wages Finance IRS PA Dept. of Revenue W-2's Annual Report of Penna. Wages Finance PA Dept. of Revenue 31-Jan IRS - W-2's Annual Report of Employee Wages Finance IRS 31-Jan Jan Sales & Use Tax Quarterly Quarterly Employer's Quartery Federal Tax Return Finance IRS Sales Tax Collection and Remission Finance Dept. of Revenue 31-Jan 1099's Annual Print and issue 1099's Finance IRS 4

5 Act 1 Key Dates 1/26/17 Make proposed preliminary budget available for public inspection or adopt a resolution indicating not to raise taxes above the index 2/15/17 Deadline for preliminary budget adoption 2/23/17 Deadline to publish a notice of intent to file for exceptions 3/2/17 Deadline to seek PDE approval for exceptions 5/31/17 Deadline by which a school board must adopt its proposed final budget 6/30/17 Deadline by which a school board must adopt its final budget for complete resources 5

6 IMPORTANT WEB FORUM TOMORROW!!!!! PASBO will host a brief web forum TOMORROW, Friday, January 13 at 9:30 am, to discuss the property tax elimination proposal and to answer your questions (to the best of our ability given the lack of specific legislation) about how to respond to this scary proposed policy and how to engage your senators on this issue. To join the web forum, go to 6

7 There s a doc for that at the Electronic Resource Center Delivering Best Practices and Good Ideas

8 Budget Blog Ning site with push notification on developments with the State Budget and other useful information Invite only Send to Jeff Ammerman to request to be added 8

9 Online registration open now Lodging is first come, first reserved. Westin will sell out. Early Bird Discount ends 1/31/17 9

10 Conference Registration A 5% registration discount will be applied to online registrations Early Registration Registration After 1/31/17 Active/Support/Education Members Three Day Conference (Wednesday thru Friday) includes 3 continental breakfast & 3 lunches Two Day Conference (Wed/Thurs or Thurs/Friday) includes 2 continental breakfast & 2 lunches Single Day Wednesday, Thursday or Friday includes 1 continental breakfast & 1 lunch $ $ $ $ $ $ Webcast $175 $175 Non-Member School Employee $100 higher $100 higher 10

11 Real Estate Tax Collection Tax collectors are elected in municipal elections to serve four-year terms. These collectors are empowered to collect taxes authorized by the Public School Code. This includes school real estate tax and a single $5.00 per capita tax. 11

12 Real Estate Tax Collection Tax collector qualifications for most municipalities (like school director qualifications) are minimal - 21 years of age and a resident of the electing jurisdiction for one year. Tax collectors may not hold other elected offices. 12

13 Real Estate Tax Collection Tax collector terms for most municipalities run for four years effective the first Monday in January following election (although for school districts, the following July 1 is the relevant date). Tax collectors are the only elected officials whose duties continue after their terms officially expire, continuing in office with powers to collect taxes and receive compensation until their accounts are settled. 13

14 Real Estate Tax Collection Tax collectors must be bonded to collect taxes. The bond is the promise of a bonding (insurance) company to reimburse the school district for tax collector losses. Counties are authorized to bid bonds jointly and pro-rate the charges back to the participating municipalities, including school districts. 14

15 Tax Collector Compensation Without action by the taxing jurisdiction, compensation continues from term to term. If the taxing jurisdiction wishes to change tax collector compensation, it must do so prior to February 15 in the year of election. February 15, 2017 is one of those years. 15

16 Tax Collector Compensation The February 15 deadline for alteration also applies to office and expense allowances and fringe benefits. Compensation cannot be changed during the term of office A change in expense reimbursement policy is considered a change in compensation. 16

17 Tax Collector Compenstation There are three basic methods of tax collector compensation: Salary A fixed amount is established for a period of time and paid periodically regardless of collections or value of duplicate Fee per bill A fixed amount is paid for each tax bill collected Commission A percentage of amounts collected (but not to exceed 5%) 17

18 Tax Collector Compensation Authority to establish collector compensation is not absolute. Courts can overturn board established rates if deemed established under an abuse of authority. This becomes a particular issue when school districts reduce tax collector compensation. 18

19 Tax Collector Compensation School districts may not provide health insurance to tax collectors. Amounts paid to tax collectors are specifically designated as being subject to social security tax with employee withholding and employer share as if the collector were an employee of the school district. Tax collectors not generally eligible to participate in PSERS 19

20 Tax Collector Compensation Tax collectors cannot deduct their commissions from the amount they collect prior to turning them over to the school district. They must turn the taxes over in full and then be paid. Likewise, the tax collector may not deduct expenses from the amount of collections. 20

21 Compensation Policies After Pennridge What should you do now before 2/15/17? Should review current tax collector policies/compensation resolution With upcoming Property Tax elimination legislation pending, consider what might happen if tax collectors are left to only collect a small portion of existing property tax for debt, per capita, and occupation tax bills (if you still levy those). Lots of unanswered questions about this legislation (which as a reminder we will talk about tomorrow at our web forum) 21

22 Appointment of a Different Collector There is no authority in law for a school district to unilaterally replace the elected collector with respect to School Code taxes (real estate and $5 per capita) 22

23 Appointment of a Different Collector Many school districts in Pennsylvania do collect their own taxes in lieu of an elected collector, but the mechanism to do so is complex Generally only an option if the elected collector resigns 23

24 Tax Collection Process Bills must be mailed by tax collectors on July 1 if they receive their duplicates and bills prior to June 16. Otherwise, bills must be mailed within 15 days after receipt 24

25 Tax Bill Required Elements The date of the notice - the date of the notice should be the date the notice is mailed, since this is the date from which discount, face and penalty periods are calculated Rate of taxation in millage Valuation and identification of property 25

26 Tax Bill Required Elements Total amount billed for the current year Statement that the taxes are due and payable A request for payment of the taxes Statement as to when and where the taxes can be paid 26

27 Tax Bill Required Elements Dates for discount, face and penalty periods Indication of original amount of tax liability Indication of amount of homestead exclusion Indication of net amount of tax due Dates for Installment Payments 27

28 Discount/Penalty Discount 2% of face amount if paid within two months of the mailing date. Face Payment at face if paid within two months following the discount period. Penalty No more than 10% of face amount if paid after four months of the mailing date. 28

29 Installment Payments Qualifying taxpayers must be given the opportunity to pay in at least three installments, but payment opportunity can be no greater than monthly. As a practical matter, the number of allowable installments is limited by the county turnover date. For example, if the host county establishes a delinquent tax turnover date of December 31, the school district s installment collection program must conclude by December

30 Tax Collector Bank Account All tax funds collected by the tax collector should be deposited in a bank account. The tax collector only serves as trustee of the funds; any interest earned on the tax monies belongs to the taxing district, not to the tax collector. In some jurisdictions, tax collectors deposit funds directly into the accounts of the taxing districts. This practice is quite acceptable. 30

31 Reporting Requirements The tax collector is required to make periodic reports to the taxing district. These reports are due by the tenth day of each month for the previous month s activity, but may be required more frequently by the taxing district by ordinance or resolution. 31

32 Reporting Requirements The monthly statement must list all taxes collected for the taxing district for the reporting period. Must list the names of taxpayers and amount collected from each, including discounts and penalties Must carry a total of all taxes collected with discounts and penalties for the reporting period. 32

33 Reporting Requirements If the monthly reports are not filed on time, the taxing district may impose late filing fees, not to exceed $20 for each business day for the first 6 days the reports are over due. After 6 days, the late fee cannot exceed $10 for each additional business day up to a maximum fee of $250 per overdue report 33

34 Year End Settlement The tax collector must make a final settlement of the tax duplicate by January 15 for the prior calendar year This involves settlement of all taxes on the duplicate, discharge of bond liability, audit and return of unpaid real estate taxes to the county tax claim bureau. Settlement for the current year must be made before the tax collector may receive a duplicate for the following year. 34

35 Tax Collector Manual DCED free PDF Publication More in-depth information than we covered here Read it!!! 35

36 Time for Questions! Send text questions using the Chat function at the left side of your screen. Type message in box and click Enter to send.

37 Thank you for your participation! CPE and CEU Credits are not available for this forum. Next FYI is May 8 at 9 am. Visit pasbo.org/fyi