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CENTAX closure may be imminent

August 23, 2012

Following the replacement of Elk County's former earned income tax (EIT) collector CENTAX, by officials citing the company's failure to process tax returns and distribute funds in a timely manner, reports that the company is soon to shut down operations for good have begun to surface.
William Leonard of Berkheimer Associates, the tax collection firm appointed by Elk County's Tax Collection Committee, to replace CENTAX spoke to The Ridgway Record regarding his knowledge of the situation and what CENTAX's closure could mean for the taxpayers of Elk County, as well as his company's ability to assume operations here.

The beginning of the end
Tax collection firms like CENTAX were put in place to collect and distribute EIT and Act 511 taxes to local municipalities and school districts following the state's passage of Act 32, which limited each county to one EIT tax collector.
According to members of the Elk County Tax Collection Committee, the problems with CENTAX began to escalate soon after the company initiated EIT collections in the county in January of this year.
Committee members were inundated with complaints from taxpayers concerning checks issued to CENTAX, some as long as six months, that had yet to be cashed. In addition, the committee said several thousand dollars in EIT monies, collected by CENTAX and slated for distribution to local municipalities and school districts, was unaccounted for.
Leonard said the demise of CENTAX became more and more likely as more and more counties began terminating their contracts with CENTAX for the same reasons as those referenced by Elk County tax officials and that as a result, consumer confidence in the firm is at an all-time low.
"Basically the tax collection districts are not getting their monies and are turning around and terminating all of their contracts," Leonard said.
Leonard said that of the 12 counties in Pennsylvania in which CENTAX had been appointed as Act 32 collector, including Elk County, there are only three-- Clarion, Delaware, and Potter counties-- which have yet to announce replacements for CENTAX. Leonard said that Berkheimer has been named CENTAX's successor in eight of those 12 counties.
"If you have twelve contracts that you're working with and here it is August of the first year of your three-year contract and nine of them have already terminated you, that's not a good sign," Leonard said.
Leonard said that as a result, the company will be unable to bounce back from the events of the past year, but while reports have CENTAX closing as soon as the month's end, Leonard said to his understanding the time frame is more likely at the end of the year.
"Right now they're still viable as far as doing the work and processing, and hopefully they'll continue to get that and move forward. I haven't heard anything as far as any specific dates, but my gut feeling on it is that they won't be around at the end of the year," Leonard said.
Leonard said the termination of their contracts leaves no continued revenue stream for CENTAX following the collection of payments received for services rendered.
"First they're losing all of the 2012 stuff, that's their current revenue, and they've already collected the 2011 [taxes], and they would have gotten paid for that and if they're not collecting anything in 2012, they're not getting and revenue stream," Leonard said.

Pick up a copy of the Friday, Aug. 24, 2012 edition of The Ridgway Record for more.

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