County treasurers seek to collect overdue state taxes

by Sherry Hamilton - Posted on Aug 11, 2010 - 03:00 PM

Virginia’s treasurers are asking the Virginia Department of Taxation for more work to do.

With 130 offices across the state, local treasurers can be more efficient in collecting long-overdue taxes than the companies the state has been hiring to go after delinquent taxpayers, according to the Virginia Association of Treasurers.

Tara Thomas, Gloucester County Treasurer, said it’s been bothering her for some time that the state wasn’t taking advantage of the opportunity to use treasurer’s offices to help collect state taxes along with local taxes.

"We’re already collecting from these people," she said. "Let us be the focal point for collections for these localities."

Thomas said that both the state and the localities are having revenue issues and "we’ve been a prime place for funding cuts." "Rather than looking at us as a place to cut," she said, the state should "use us for something we can do."

While treasurers have been bringing the issue up at meetings for the past five or six years, it’s only been since Gov. Bob McDonnell announced the establishment of his Commission on Government Reform and Restructuring that the issue has gained traction and become a more organized effort.

"The governor put out a call for town hall-type meetings," Thomas said, "and we as an association had people speak at each … We say ‘why don’t you put us to work—use the resources you’ve got?’"

Thomas said she sees a partnership similar to that of the Department of Motor Vehicles and some treasurer and commissioner of the revenue offices. Treasurer’s offices across Virginia already handle tax forms for those residents who choose to send them to the locality first rather than directly to the state, and then they take care of collecting delinquent taxes from any of those filers who don’t pay on time.

"I’m saying let’s take it from there," said Thomas.

She said local treasurers could be collecting delinquent sales and meals taxes, as well.

"We’re right here and can move quickly to get both in one shot," she said. "We could make a joint effort to collect everything."

The payment structure is already in place, said Thomas, since the state currently provides treasurer’s offices with some of their funding.

"They just haven’t taken advantage of the fact that they have these local offices," she said.

Of course, collecting more taxes would mean a larger workload, so Thomas said there would have to be compensation to the localities.

"The research is time-consuming," she said. "You’re doing it account by account, plus liens and other court paperwork. If it’s an individual, you have to go out to find where they work or where they bank."

The biggest portion of the battle with delinquent taxes, said Thomas, is finding the people who owe them and making them aware of their delinquency.

"It could be an improper assessment," she said, "but until you find the people, you don’t know."

Virginia Association of Treasurers’ president Ann Davis, who is treasurer of James City County and a former state tax department employee, said that representatives of the treasurers are sitting down with representatives from the department of taxation Friday to begin working on the issue together.

With Virginia’s outstanding tax delinquency close to $2 billion, Davis is hoping to break down the tax liability per locality so each treasurer can know what their potential is for collecting back taxes. She said if the state tax department isn’t in favor of a partnership, she’s going to want to know what their reservations are.

The treasurers aren’t calling for drastic changes. There would still be a place for private, third-party collectors to go after more recent delinquencies, she said, but they don’t do as well when it comes to old accounts that are two to three years past due. Those accounts are better left to a local treasurer who is right in the community and can help people who are having financial troubles structure a payment system that will work for them, or can go after people who refuse to pay their taxes by filing property liens or seizing their assets and selling them to satisfy the debt owed.

In addition, there is already a statute that enables treasurers to collect for the state, said Davis, so it’s just a matter of "the powers-that-be (getting) serious about the legislation." The counties would probably look on it favorably, she said, as long as it shows results.

Outside collection agencies have typically received 20-35 percent of the taxes they’ve collected, said Davis, and she thinks that money should be kept in the state and paid to the localities instead.

"The technology is out there for this, and the governor is going all around the state with a reform group looking for ideas for efficiency and revenue," she said. "We’re trying to shoot for a true partnership with the governor’s office and the tax department. Let’s just really roll up our sleeves and get it done."