City to explore new tax debt collection efforts
Joined by Councilman-at-large Allan Domb, Philadelphia Mayor Jim Kenney announced today the launch of a feasibility study of business tax delinquency sales.
The study will focus on delinquencies of the Business Income and Receipts Tax (BIRT), and will examine Councilman Domb’s proposal to sell older BIRT debts to a third party. According to a press release, Philadelphia currently has tools in place to recapture recent debts of companies still in operation, including the use of collection agencies and the ability to close non-compliant businesses.
According to PhillyVoice, Kenney said that the analysis will determine “what exactly is collectable.”
“A tax debt sale can be a vital tool in the City’s effort to bring in delinquent tax dollars,” Kenney said in a statement. “And I appreciate Councilman Domb’s leadership in this area.”
Currently the law department is reviewing relevant state and local law to determine if there are any restrictions on Philadelphia’s ability to sell these debts.
Once the legality is confirmed, the feasibility study will assess the requirements and costs associated with selling these debts and potential revenues that would be generated.
“I campaigned on the promise to help reign in the city’s tax delinquency, and I appreciate the mayor’s willingness to give these proposals serious examination,” Councilman Domb said in a press release. “A sale of business tax debts, I believe, will prove to be an effective tool in making businesses compliant.”
Mayor Kenney's announcement comes as the Revenue Department continues its collaboration with Councilman Domb and the National Tax Lien Association on a separate feasibility study to expand and improve Philadelphia’s use of Real Estate Tax Lien sales to increase collections.