Leaders continue to explore in-house tax system

Perry Village Council soon should have the information it needs to make a decision on whether to start an in-house system of collecting municipal income taxes.

Council President Jean Schonauer and village Chief Fiscal Officer Joanne Clapp last year started exploring the feasibility of launching an in-house operation for municipal income tax collection, instead of hiring an outside agency to perform this function. Currently, the village retains the Regional Income Tax Agency, or RITA, to collect its income tax and enforce tax ordinances.

Schonauer, during the Feb. 14 Village Council meeting, said price quotes for income tax software have been secured from all three companies that were contacted and demonstrated their products for village leaders.

“We’re still waiting for one more price,” she said.

The third company with whom village leaders met is the same firm that provides software for the city of Geneva’s in-house income tax office, Schonauer said. In addition to specializing in income tax software, that company also offers the same type of services that RITA performs for the village.

“We’ve also asked them to provide that cost, as well,” Schonauer said.

While RITA is paid a percentage of the net amount of taxes collected, the other company mentioned by Schonauer charges on a cost per transaction basis.

“For each tax return they process, it’s ‘x’ number of dollars,” she explained.

When it comes to an inhouse income tax operation, village Mayor James Gessic said last year this type of system could help the village increase collections and accountability. In 2018, Clapp received a telephone call from RITA about the village needing to refund a business about $21,400 because it was not located in the village in 2016, council minutes from Sept. 13 showed.

“The village is continuing to look at income tax software to try to see if it is feasible to bring income tax collection in-house,” the minutes stated.

In June, Schonauer began what she described as a “fact-finding mission” with Clapp when they visited government officials in the city of Geneva, which launched its own municipal income tax office after relying on an outside contractor to carry out these duties.

Geneva officials said that when the city began doing its own income tax collection, they found there were people who moved into the community and never paid income tax, somehow evading the attention of the city’s contracted tax collector, Schonauer explained at a June 14 Village Council meeting.

Overall, Geneva officials said it was well worth it to bring income tax collection in-house, and they would never go back to contracting with an outside tax collector, she said.

As for how much time it might require to get an income tax collection system in place inside Village Hall, Schonauer offered some insight at the Feb. 14 council meeting.

She said one of the three software providers seeking to do business with the village estimated that the implementation period would take two to three months.

Schonauer told her council colleagues and village administrators that the fact-finding phase on inhouse income tax collection is nearing completion.

“I just wanted to let you know we’re still moving ahead with that process and we’ve got some really good information, and when we have that final piece of the puzzle (the fourth price quote), we’ll present that, probably at the next meeting,” she said.