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Finance director outlines rising sales‑tax delinquencies; assembly urges tougher collection on high balances
Summary
Finance Director Charlene Thomas reported a small increase in sales‑tax delinquencies (from about 10.4% to 12.94% of registrants) and reviewed enforcement tools (penalties, liens, small claims, garnishments); assembly members asked staff to pursue more aggressive collection against large delinquent accounts while balancing the impact on small seasonal businesses.
Finance Director Charlene Thomas led a work session on Feb. 9 explaining how borough sales tax is administered, why compliance matters and the consequences of noncompliance.
Thomas said 2,241 businesses are registered to collect sales tax in the borough and that about 94% are fully compliant. She noted the delinquency rate rose from roughly 10.4% last calendar year to about 12.94% in the current period; a small number of high‑balance accounts account for a disproportionate share of unpaid taxes. Penalties escalate quickly (a 1% penalty within seven days, rising to a maximum penalty of 25%, plus 1% monthly interest), and unpaid accounts are subject to estimated forced filings when returns are not filed.
Thomas reviewed enforcement options: reminders and payment plans; conversion from quarterly to monthly reporting for recurring late filers; small‑claims and civil court actions; liens on property; bank account garnishment (bank sweeps); levies (including on equipment or inventory); and injunctions to stop business operations in egregious cases. The borough pays court costs up front and seeks to recover them in judgment.
Assemblymembers asked whether accounts were bundled and how often the borough turns matters over to collection agencies. Borough counsel and staff said they sometimes use bank sweeps and writs of execution after judgments, and that levies or injunctions are legally available but infrequently used because they can end a business. Several assemblymembers urged using more aggressive enforcement tools for large, high‑balance delinquencies while being mindful of seasonal businesses and the administrative burden on staff.
Next steps: staff will continue outreach, consider thresholds for intensified enforcement and provide additional historical data on post‑fiscal year accruals and the recent uptick in delinquencies.
