Changes to the state tax code have brought some redundancy to how earned income tax is collected in Warren County.
Act 32, implemented at the beginning of the year, requires that each county consolidate to one tax collector, formulate a tax bureau, provide a tax appeals board, and inform employers about the need to ensure that they are withholding the proper rate for where employees live versus where they work.
In Warren County, that tax bureau to collect earned income tax is the EIT Collection Committee.
The problem?
Tax collection has been consolidated through the Warren County School District for quite some time.
So the result is that the committee collects taxes that it then immediately forwards to the school district, incurring legal and audit fees along the way.
Alan Kugler with PA Futures, the consultant who works with the Council of Governments, raised the issue at Wednesday night's COG meeting in order to discuss the issue with State Rep. Kathy Rapp (R-65), who was in attendance.
"It's about the requirement that Warren County participate under that law," Kugler said, asking Rapp whether there is any way to opt out of that requirement.
"When that bill came up, I didn't have a problem with it because we had an earned income tax office," Rapp said. "Once the regulators get ahold of a piece of legislation, the way they write the rules can be somewhat problematic."
Rapp said she is open amending the act to allow counties to opt out. "I can't promise that we can be successful in doing that, but it's an option," she said.
"The issue that I hear is that there has to be an existence of that (EIT collection) committee" to ensure that taxes are collected responsibly, Kugler said.
"It's very redundant," Clarendon Borough Council President Paul Pascuzzi said. "The first winner is the solicitor of the committee (and the) second winner is the audit firm.
"Harrisburg does what Harrisburg does," he added.
Looking at the existence of the committee, he added, "I don't know why we do that to ourselves. It doesn't make sense to us."
Pleasant Township Supervisor Arden Knapp said for areas that were having problems collecting the tax appropriately, the committee could be a good idea. He proposed that if a county doesn't have problems with collecting for several years that the committee be allowed to disband.
The committee currently covers costs by billing the county's municipalities.
"Our system was working pretty good," Sugar Grove Mayor Dutch Strand said, "but now all it does is cost us money."