SALEM - A one-time only amnesty program launched Monday and announced last month has already brought money into city income tax coffers and resulted in lots of inquiries from both citizens and businesses.
"This is an opportunity for people to clear up their taxes before we take another step with our contract with CCA," Salem City Income Tax Administrator Fred Pamer said.
The city contracted with the Central Collection Agency through the city of Cleveland Income Tax Department to help locate people who should be paying income tax to the city but who have not filed or reported income. The city of Cleveland has access to federal income tax records that the city of Salem does not and will compare those records with Salem's records to track down city income tax evaders.
Before the city takes that step, though, city council agreed to hold the first-ever, one-time only, income tax amnesty program.
Pamer said the idea is to pay the tax due in full by Nov. 15, which is the absolute last day for the program, and the city will waive the penalty charges and reduce the interest due by half. He said that's a considerable savings over what they'll pay if they wait until after Nov. 15 or for CCA to start searching for non-filers.
As an example of the savings possible, Pamer said suppose a taxpayer comes in and owes $2,400. Once the penalties are waived and the interest cut in half, the taxpayer can save $900 and only end up paying $1,500.
WHAT: Salem City Income Tax Amnesty Program
DEADLINE: Nov. 15 deadline
FOR INFO:?Call 330-332-4241, option 2
City Treasurer Bob Tullis updated council members on the results so far, saying it's been effective. He said if people owe the city money for income tax or think they might owe or aren't sure of their status, they should call the income tax department at 330-332-4241, option 2, or just stop in the second-floor office in city hall.
At least 30 people had come in or made some type of contact with the office so far, with some resolving their situations right away and some still getting their information together.
Tullis explained previously that senior citizens who live in the city who don't have earned income from W-2 wages, rental income, business income or lottery winnings have no tax liability.
Income from Social Security, a pension or investment income is not considered taxable income by the city, but they must register and file at least one time with the income tax department for records purposes.
All city residents 18 years or older are required to file with the income tax office even if they have no income.
Besides owing taxes, penalties and interest, violators could also face criminal charges for not filing income tax.
During the council meeting earlier this week, Mayor John Berlin asked about the landlords who are supposed to file quarterly reports regarding their tenant and whether the amnesty includes them if they're not filing the reports.
Tullis said they had not enforced the ordinance previously, but were working on it and may look at fine-tuning the ordinance. Landlords who pay water and sewer for their tenants are required to report new tenants' names to the income tax department every three months, along with listing tenant who have moved during the three-month period.
Landlords can face penalties for not filing the reports. When asked how many landlords comply with the rule, Tullis said "no one does."
He said many of them probably don't even know about the rule.
Berlin said he would like to see it enforced.