Is Philadelphia Losing Money on the Tax Amnesty? (No)
The mayor’s office released a press release today stating that the city has collected around $7 million from 9,400 people so far during the tax amnesty, which runs from May 3 to June 25. During the amnesty, people owing back taxes can pay off their balance with half interest and no penalties.
Yay! Seven million is far more money that we’ve ever seen in one place, that’s for sure. But original projections hoped to net $25 to $30 million. (Inaccurate information about the cost of the program edited out. See below.)
If the amnesty ended today, the city wouldn’t be close to meeting its projections. There are still 18 days to go, however, time for a last minute blitz.
To encourage last minute filers to get it together quickly, the mayor is starting to ramp up the rhetoric. “This is their last chance before the City gets tougher than ever before,” he said in the press release.
For more information on how to file, check out the city’s tax amnesty website, complete with a nifty clock counting down the seconds until it’s all over.
In total, the city is owed around $582 million from 190,000 delinquents, according to figures provided by Revenue Commissioner Keith Richardson in April.
If you don’t pay, the city has some tricks up its sleeves to wring the money out of you:
- turning tax debts over to lawyers and third party collection agencies for further action;
- fines of $5,000 for failure to file;
- using undercover investigators and IRS information to identify unregistered individuals and businesses;
- publication of judgments and liens against delinquent individuals and businesses;
- increased seizure and sale of property.
“When Philadelphia Tax Amnesty ends on June 25th, so does the idea that you can avoid paying your taxes and get away with it,” Nutter said.
This is the kind of tough talk he usually reserves for librarians and firefighters, so watch out, deadbeats!
Correction: The Star Group, the marketing organization working on the city tax amnesty, contacted us to point out that the city is spending $1.4 million to market the tax amnesty, not $12 million as we originally wrote in this post. The $12 million figure had been previously reported in this blog and other publications as the cost to run the amnesty, including marketing and collection fees. Joanna Ford from the Star Group says the number probably came from early estimates before the Star Group got involved in early April. There are still collection costs to figure in, but to answer our own question in the headline, no, the city is probably not losing money at this point.