State and city lawmakers take aim at tax delinquents

Go­ing after de­lin­quent tax­pay­ers was on the minds of law­makers in Har­ris­burg and City Hall last week. 

The state House of Rep­res­ent­at­ives passed two meas­ures that will help the city chase down the as­sets of people who own prop­erty in Phil­adelphia but don’t pay their real es­tate taxes.

House Bill 388 would let the city put li­ens on prop­er­ties tax de­lin­quents own any­where in Pennsylvania. Right now, the city puts li­ens on prop­er­ties tax de­lin­quents own with­in the city. If an own­er doesn’t really care what hap­pens to a city prop­erty on which he hasn’t paid tax, a li­en on it could amount to little more than a piece of pa­per, for­cing the city to en­gage in time-con­sum­ing and costly lit­ig­a­tion.

Giv­ing the city the abil­ity to place li­ens on any prop­er­ties the de­lin­quent tax­pay­er owns any­where in the com­mon­wealth gives the city a little more muscle in col­lect­ing what’s past due.

House Bill 391 would al­low some Phil­adelphia own­ers to pay their prop­erty taxes in in­stall­ments.

The bills are ex­pec­ted to be passed by the state Sen­ate, state Rep. Ed Neilson (D-169th dist.) said last week. They have bi-par­tis­an sup­port, he said.

In City Coun­cil, mem­bers re­cently un­an­im­ously passed a pair of bills sup­por­ted by May­or Mi­chael Nut­ter.

Bill 120822, which passed Coun­cil un­an­im­ously on April 4, es­tab­lishes fixed and more reas­on­able in­terest and pen­alty rates for all de­lin­quent taxes oth­er than real es­tate taxes and cla­ri­fies the lan­guage cov­er­ing lim­it­a­tions of ac­tions to re­cov­er and as­sess taxes for the City and School Dis­trict.

“We want to make it easi­er for people to work with us in good faith to pay off their de­lin­quent tax li­ab­il­ity,” said Coun­cil­man Curtis Jones (D-4th dist.), who co-sponsored the bill with Coun­cil­man Bill Green (D-at large). “This meas­ure provides reas­on­able terms for tax­pay­ers to en­cour­age them to pay off their de­lin­quent ac­counts.”

Pre­vi­ously, some de­lin­quent busi­ness tax ac­counts saw in­terest at levels close to 50 per­cent between pen­al­ties and in­terest.

Bill 120823-AA, also co-sponsored by Jones and Green, be­came law dur­ing the May 16 Coun­cil ses­sion. All pay­ments to de­lin­quent  ac­counts will be ap­plied first to the prin­cip­al owed. This re­places the cur­rent sys­tem which ap­plies pay­ments to in­terest, prin­cip­al and fees on a pro rata basis. 

It will also re­quire re­ceipts of all trans­ac­tions upon tax pay­er re­quest start­ing in 2015.

The res­ult will be pay­ments go­ing to­ward re­du­cing the prin­cip­al, en­cour­aging and en­abling tax pay­ers to ac­tu­ally get out of their debts, Jones and Green said in a news re­lease.

“This is an im­port­ant change for tax­pay­ers,” Coun­cil­man Jones said. “This meas­ure stops the pro­cess of tax­pay­ers mak­ing reg­u­lar pay­ments and nev­er see­ing their bal­ance go down.”

The bill ori­gin­ally ap­plied the prin­cip­al-first pay­ment scheme to Busi­ness In­come and Re­ceipts Taxes and the en­acted bill was amended by Coun­cil­men Green and Jones to ap­ply to de­lin­quent real es­tate ac­counts. ••

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