The Herald, Sharon, Pa.

Breaking News

Local News

January 16, 2013

Wage-tax claim pits Hermitage vs. Sharon

SHARON, HERMITAGE — Hermitage city and school district are due about $130,000 in wage taxes from the city of Sharon, a recently filed lawsuit claims, and the company hired to handle that money is trying to destroy its records.

In a complaint filed Jan. 8 in Mercer County Common Pleas Court, former receiver of taxes Sherry Iversen said the company Sharon hired in 2007 to collect earned income taxes failed to distribute $128,443.57 to the Hermitage taxing bodies.

“I’m not going to comment on a matter that’s before the courts,” Sharon City Manager Scott Andrejchak said. “Obviously there needs to be an accounting to verify their claim.”

Central Tax Bureau of Pennsylvania, commonly known as Centax, collected resident and non-resident taxes for Sharon and was supposed to forward payments to the workers’ home municipalities.

After reviewing Hermitage residents’ tax returns, Iversen said a large sum of tax revenue withheld by employers in Sharon and submitted to Centax were not passed on.

“Sharon, through its agent, has illegally failed to distribute earned income tax revenue that belongs to Hermitage for tax years 2007 through 2011,” the suit states.

During that time, Andrejchak said city officials had “very little to do with the collection process.”

The lawsuit names the city of Sharon and Travelers Casualty and Surety Co. of America, Connecticut, the bond insurance company for Centax, as defendants. Centax, whose Bridgeville office handled Sharon’s accounts, is not named as a defendant in the suit.

In a statement e-mailed to The Herald, Hermitage wage tax solicitor Ronald P. McCall said, “The timing of the lawsuit was largely the result of the fact that if the funds are not available through Centax, the Hermitage Receiver of Taxes wanted to make sure to make a claim against the Centax bond in a timely manner.”

Centax went out of business in fall 2012 and in December petitioned through its receivership to destroy tax and business documents kept in leased premises.

The company’s receiver, Campbell & Levine law firm, Pittsburgh, claimed the materials are “not only unnecessary to the wind-down efforts, but are a burden to its efforts” and the receiver doesn’t have money to pay rent for the storage space.

The city of Sharon on Jan. 8 filed an official objection to Centax’s request to destroy their records. In the motion, Sharon’s attorney writes that the city is distressed and unable to pay the $136,092 Hermitage claims Centax did not forward.

“It’s a situation that’s affecting a lot of communities,” said Andrejchak, noting that Centax collected taxes for more than 20 entities in the state.

Sharon needs the company’s records to determine the following: The amount of taxes collected and not distributed to other municipalities; whose taxes were or were not collected; to seek redress against the bond company; and to recoup the lost taxes.

Officials believe that the loss in earned income taxes could be several hundred thousand dollars and if there was a loss of emergency management services taxes – an annual fee also handled by Centax – that could also be substantial for Sharon.

If the motion to destroy the records is granted before the city can recover documents pertinent to its case, the city will be “irreparably harmed” in a manner that far outweighs any harm from preserving the records, the objection states.

Iversen requests in the court order Sharon to pay the taxes due plus costs and interest. According to a letter from McCall dated Aug. 13, Iversen sent “numerous claims” to Centax regarding these taxes with “limited success.”

At that point, Hermitage was owed $67,530 in earned income taxes from 2011 and a total of $68,561 from 2005 to 2010, the letter states.

“We are very interested in getting to the bottom of it,” Andrejchak said. “The questions of what’s owed will have to come out in the course of litigation.”

Pennsylvania went to a countywide earned income tax collection system in January 2012, and Berkheimer and Associates was contracted for Mercer County’s government entities.

1
Text Only
Local News
  • Doss: Public has right to know

    A major part of Farrell council’s work session Monday was spent deciding whether or not to inform the audience about an unofficial police proposal from the City of Sharon.

    July 30, 2014

  • Budget falling short despite tax hike

    Farrell residents may have seen an income tax increase this year, but the city isn’t seeing the extra dollars City Manager Michael Ceci budgeted for.

    July 30, 2014

  • oakwood graves 1 Resting together

    Visitors to Oakwood Cemetery would see many  familiar local names if they looked down the hillside to the left just inside the gate on Sharon’s North Oakland Avenue.

    July 30, 2014 3 Photos

  • Police: Kids in car were OK

    The mother of two young children was drunk and passed out when police found them all in a car parked along a city street, Sharon police said.

    July 29, 2014

  • To talk – or not – about police

    The mysterious agenda item, “No. 10,” at Farrell’s council meeting Monday became the center of a heated workshop and business session.

    July 29, 2014

  • Community thanks its first-responders

    Sharpsville honored its emergency responders Sunday at an event that included Mertz Towers residents as special guests.

    July 28, 2014

  • Drilling boom challenges state inspectors

    The state’s 83 well inspectors face a daunting enough challenge keeping tabs on 120,000 active oil and gas wells that have been drilled over the last century.

    July 28, 2014

  • Kidds Mill Covered Bridge A span of time

    Four generations of the Cadman family have enjoyed the Kidds Mill Covered Bridge, which is in Pymatuning Township near where the family’s ancestral farm is located.

    July 28, 2014 3 Photos

  • Intruder hurts woman, takes $5

    A home invasion in Hermitage Friday night sent an elderly woman to the hospital and netted the robber $5.

    July 27, 2014

  • national night out March against crime set for Aug. 5

    At the last Southwest Mercer County Regional Police Commission meeting, Chief Riley Smoot Jr. presented the number of incidents for each of the four communities in May.

    Farrell topped out at 819.

    July 27, 2014 1 Photo

  • high street trail Peaceful pathways

    History buffs and picnickers in the Shenango Valley won’t have to drive to Sharpsville to hang out at the old Erie Canal extension lock. They’ll soon have the option to walk or roll in on bicycles and even powered chairs to visit Canal Park near the outflow of Shenango Dam.

    July 27, 2014 1 Photo

  • balloonquest1 Balloon Quest celebrates 25 years

    Today is the final day of the 25th annual Western Pennsylvania Balloon Quest at Scotland Meadows Park.

    July 27, 2014 1 Photo

  • News briefs from July 26, 2014

    Man faces bomb threat charges

    June building tops $4 million in Hermitage

    July 26, 2014

  • Elderly man survives plane crash

    An elderly man survived wrecking his plane into a bank, then landing into a wetland, about 200 feet south of Runway 28 at Grove City Regional Airport in Springfield Township on Friday.

    July 26, 2014

  • Dontae Rashad Pinkins Man arrested for April gunfight

    Federal marshals and local police arrested Dontae Rashad Pinkins Thursday on a warrant accusing him of involvement in an April gunfight with another man in a Sharon alley.

    July 26, 2014 1 Photo