Posts Tagged ‘Add new tag’

Here we go…Massachusetts State Department Revenue data shows 158 communities posted tax collection rates of 97 percent or worse - with some Berkshire towns collecting as little as 70 to 72 percent of their tax levy. Statewide, the fiscal 2008 local collection rate was within DOR goals: 1.9 percent of the $10.9 billion real estate and property tax levy went uncollected.

Officials said the bad economy is making tax collection more difficult. Local aid was slashed by $724 million last year and could be cut again by about $200 million in next year’s state budget.

“Increasing the rate of collections will just help on the margins,” said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation. “Even if they change their collection rate, it does not change the fundamental reality that they rely so heavily on local aid.”

The city reporting the lowest collection rate was Springfield at 95 percent, DOR figures show.

Because of new credit card company (Visa, MasterCard & AMEX) rules, Massachusetts municipalities can accept credit card, debit card, echeck and other types of payment (e.g. BillMeLater) for tax payments in their offices (IN-PERSON) and in their offices (OVER THE PHONE & IN THE MAIL) and have the fee assessed back to the citizen that chooses to use their card or other method of payment.

This means these municipalities can accept these forms of payment at no charge to them. This could substantially increase the collection rate for all MA municipalities.

This is also happening in:

New Jersey

San Diego

Clark County/Las Vegas

Kansas

Jim

I figured I would let most of you get through your 09 tax collection season and 2010 budgets before I started posting again.  Coincidently, I was faced with the challenge of my life,  staying with and caring for my Mom who was diagnosed with pancreatic cancer just before the holidays (we will probably loose her  this month).

One of the most interesting developments in the last quarter of 2009 was the emergence of ONLINE debit payments for Property taxes with a Visa branded debit card, where the payment is processed NOT over the Visa network but over the Interbank Network associated with the card (NYCE, Star, Pulse etc.)

Many cities and counties have accepted “PIN Debit” in their offices because the transaction fees are substantially lower than those assessed by Visa and MasterCard.  These fees are assessed by the Interbank Network associated with the card and required a PIN to be entered at the point of sale other the transaction is processed over Visa/Mastercard’s networks.

Now an online “PIN-less” debit is being offered by many of the Interbank networks that connect ATM machines and point of sale electronic funds tranfer at retail locations and member banks.  Previously a pin was needed to process over these networks, otherwise the transaction would be processed either as a Visa or MasterCard transaction when the card was swiped.  While more costly than the ACH, PIN-debit transactions usually cost merchants considerably less to accept than credit card or signature-based debit card transactions.

Many Third Parties are now offering “Online PIN-less Debit” for tax and other payments.  Meaning that if you have a Visa branded debit card and you use these third parties, your transaction will be processed over the Interbank Network associated with the card instead of Visa’s network.  This also means the third party that is collecting your fees pays a much smaller transaction.

It also means that Visa does not get this transaction revenue.  Presently this appears to be a violation of Visa’s Tax Payment Program Rules.  However, I have yet to get an opinion from Visa on this.

If in fact your Third Party is offering this and assessing the fee back to your citizen, you should be aware that the third parties transaction fees have decreased substantially and this should be passed along to the public.

I would appreciate comments….which I will respond to, while we wait to see see how this issue plays out with Visa.

Jim