The Herald, Sharon, Pa.

Local News

June 7, 2014

City settles wage tax dispute

SHARON — Sharon council is ready to close the books on a dispute with Hermitage over wage taxes. Lawmakers said Thursday they’re going to accept a settlement worked out as part of a lawsuit.

Central Tax Bureau of Pennsylvania or Centax, the  company Sharon had hired to collect earned income taxes from people who worked at city businesses, didn’t make a proper distribution of some of the money. Wage taxes owed  to Hermitage for 2007 through 2011 weren’t sent there.

“They sent money to us that should have gone to Hermitage,” solicitor Bill Madden told council members. “It’s been audited, and we’re satisfied that the amounts are right. There was a certain amount that was paid to us that we spent, and we have to repay it.”

Sherry L. Iversen, Hermitage’s former receiver of taxes, filed a lawsuit in January 2013 against Sharon and two bonding companies hired by Centax. She alleged that Centax didn’t pass on about $130,000 in wage taxes of employees who worked in Sharon but lived in Hermitage.

The parties were scheduled to appear before a judge in Mercer County Common Pleas Court, but settlement offers put court action on hold in February.

City Manager Scott Andrejchak said Sharon’s share is about $35,000. The rest, he said, will be paid by Travelers Casualty and Surety Co. of America,  and Fidelity Deposit Co. of Maryland. Centax went out of business in 2012.

Lawmakers will vote to accept the settlement at the June 19 meeting, and the city will pay Hermitage after that, Andrejchak said.

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