Allentown staff push compliance work on economic-nexus collection while exploring other revenue options
Loading...
Summary
Finance staff said a 2024 procurement found limited near-term new revenue under current law; the city has begun compliance and auditing work on economic‑nexus (business privilege) collections and has sent letters to major online sellers to pursue owed taxes under a BrightLine threshold.
The Allentown Budget & Finance Committee discussed alternative revenue sources, with city staff describing a 2024 procurement that sought outside help to identify revenue streams and reporting the city is now focusing on compliance and auditing to collect business‑privilege revenue under economic‑nexus rules.
Director Patel said three firms bid on the 2024 scope (Revenue Solutions Inc., Econsult Solutions Inc., and the Pennsylvania Economy League), but the administration concluded the proposals primarily reorganized data for presentation and did not identify new revenue that could be quickly captured given statutory constraints. "We did not move forward with that," Patel said.
The committee’s main takeaway: staff are concentrating on enforcing the city’s existing business-privilege tax where companies meet an economic-nexus BrightLine. Mike Zumas described the BrightLine threshold used as a compliance test: a minimum number of transactions in the city (discussed in the meeting as a 15-transaction example) and a gross-receipts threshold (cited as $500,000) to trigger liability under Act 511 auditing authority. Zumas said staff have sent roughly 100 letters to large sellers (Amazon, Walmart, Target) and will emphasize auditing to obtain compliance.
Committee members asked whether selling platforms are included and whether staffing limits the city’s ability to audit; staff said auditing capacity is the current constraint and that Philadelphia and some out‑of‑state cities enforce similar rules. Members requested projections and staffing needs to assess whether the expected revenue justifies hiring or reallocating auditors.
What happens next: staff will continue internal reviews of the audit process, return to committee with resource needs and projection estimates if required, and pursue compliance steps where entities meet the BrightLine test.
