Payment Detail with Monthly Reports?

A common question among tax collectors is whether they are required to submit payment detail with their monthly reports. The short answer is “probably not.” As always, the devil is in the details.

But the manual says I have to?!?!

When I was borough secretary, I would receive “Right-to-Know” requests from data collection companies quoting the Tax Collector Manual. In particular, they quoted this paragraph from the “Reports to Taxing District” section (emphasis mine):

The monthly statement must list all taxes collected for the taxing district for the reporting period. This report must list the names of taxpayers and amount collected from each including discounts and penalties and must carry a total of all taxes collected with discounts and penalties for the reporting period.

These companies did this to avoid paying tax certification fees to the collectors. As borough secretary, the above quote made clear to me that my tax collector had to turn over this payment detail. I asked him for this information, again quoting the above paragraph. He sent it to me. I then provided it to the data company who sent me the Right-to-Know request.

When I later became a tax collector, I attended the annual PSTCA conference. I heard other tax collectors insist that they were not required to submit this payment detail. Confused, I went back to the tax collector manual for a closer look.

But the law says you don’t!!!

For proof of the above requirement, the manual cites Section 25. of the Local Tax Collection Law. Here is the second paragraph of Section 25, which contains the relevant language (emphasis mine):

The tax collector shall on or before the tenth day of each month, or more frequently if required by ordinance or resolution of the taxing district, provide a true, verified statement, in writing on a form approved by the Department of Community and Economic Development, to the secretary or clerk of the taxing district or, in the case of cities of the third class, to the director of accounts and finance for all taxes collected for such taxing district during the previous month or period, giving the names of taxables, the amount collected from each, along with discounts granted or penalties applied, if any, and the total amount of taxes received, discounts granted and penalties applied. The tax collector shall include with each statement made under this section a reconciled monthly tax collector’s report for each type of tax collected for each taxing district. The report shall be reconciled from the tax duplicates to the amount of taxes remaining to be collected. A taxing district may require the elected tax collector to provide it with additional information supplementing that set forth on the form approved by the Department of Community and Economic Development.

72 P.S. 5511.25; Local Tax Collection Law Section 25.

That’s a lot of extra legalese, so I’ll summarize the key points:

  • The collector must submit the monthly DCED report by the 10th of each month
  • The taxing district may require it more often, but only if requested by ordinance or resolution
  • The report must give the names of taxables and the amount collected from each
  • The taxing district may require additional information

Careful readers will notice that the tax collection manual’s “paraphrasing” of the law leads to getting the intent wrong. The manual states, “[t]his report must list the names of taxpayers and amount collected from each…” The law states the collector must provide a statement, “giving the names of taxables, the amount collected from each…”

The manual lifts the language of the law nearly verbatim, but changes “taxables” to “taxpayers.” In the law, “taxables” refers to the types of taxes that districts levy. For example, the general “County Tax” versus a county “Debt Tax.” The law requires that these amounts be reported separately, including any discounts or penalties.

Signature Information Solutions, LLC

Why is this even an issue? Does it really matter?

The reason this is an issue is that certain data companies–such as Signature Information Solutions, LLC–take this approach as a way to circumvent requesting the information from the tax collector directly. Unlike tax certification fees, which may vary by tax collector, Right-to-Know request fees are capped by law. So, if these companies can get the information in bulk using RTK fees, they can provide their own “tax certification” services to clients, cutting out the tax collector entirely.

The problem with such an approach is that compiling tax reports is no substitute for a tax certification from the collector. Consider two quick examples. (1) John Doe pays his real estate taxes in March. The payment appears on the March report to the taxing district. In April, John Doe’s check bounces. (2) Tom Smith and his sister each have a 50% interest in a parcel. Tom pays his half of the taxes (yes, the law explicitly allows this). The report shows that a payment was received on the parcel, but not that it was only a partial payment. In both these scenarios, the data company might mistakenly report the parcel as being current on taxes.

If it’s cheaper to get the information using the Right-to-Know law, why don’t these companies just request the records directly from the tax collector? Because the tax collector is explicitly exempted from the Right-to-Know law:

(c) This section shall not be construed to do any of the following:
(1) Make a tax collector an “agency” or authorize requests of the tax collector for records pursuant to the act of June 21, 1957 (P.L.390, No.212), referred to as the Right-to-Know Law.

72 P.S. 5511.4c; Local Tax Collection Law Section 4c.

Honaman v. Township of Lower Merion

In this case, the Commonwealth Court of Pennsylvania affirmed that entities may not use the Right-to-Know law as a way to compel taxing districts to turn over tax payment detail. (Note: Honaman filed this appeal on behalf of Signature Information Solutions, LLC.)

A key part of this decision, though, was the fact that the township was not in possession of the payment detail being requested. In other words, the tax collector had not been sending the payment detail in to the township, so the township did not have the records in their possession. It’s not clear to me how the court would have ruled if the tax collector was sending that information in.

This line from page 7 of the ruling is noteworthy (emphasis mine):

Signature [Requester] cannot be permitted to indirectly acquire the Tax Collector’s records under the pretext of a Right-to-Know request to the Township when state law specifically exempts the Tax Collector from the provisions of the Right-to-Know Act [RTKL]. Furthermore, this Court determined that the requested records of the Tax Collector are not in the possession or control of the Township.

Commonwealth Court of Pennsylvania Jan 31, 2011 13 A.3d 1014 (Pa. Cmmw. Ct. 2011)

So Why Is the Short Answer, “Probably Not”?

Despite what the manual says, nothing in the law requires every tax collector to report tax payment detail. Nevertheless, the law does allow for taxing districts to require “additional information” from the tax collector.

So, if your taxing district requires you to submit payment detail with your reports, then you must do that.

Moral of the Story

The Tax Collector’s Manual is a guide. It is not infallible. The law always takes precedence.


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