The Herald, Sharon, Pa.

Local News

February 14, 2014

Cities trying to settle tax case

SHARON, HERMITAGE — Hermitage and Sharon are in discussions to settle a lawsuit Hermitage’s former receiver of taxes filed against Sharon alleging it didn’t pass on about $130,000 in wage taxes.

The parties were scheduled to appear before a judge Thursday for a settlement conference, but the conference was canceled upon the request of Brett W. Stedman, attorney for Hermitage’s Sherry L. Iversen.

Stedman had said a conference would “foster a better understanding as to the multiple parties’ positions,” but then told Mercer County Common Pleas Court Judge Christopher J. St. John that settlement offers had gone out.

Hermitage City Manager Gary P. Hinkson said Thursday he had “nothing concrete” on the settlement discussions and declined to comment until he did.

Iversen, who collected earned income taxes prior to the effective date of a state law that required a county-wide collector, filed suit Jan. 8, 2013, against Sharon and Travelers Casualty and Surety Co. of America, the bond insurance company for Central Tax Bureau of Pennsylvania, the private firm known as Centax that Sharon hired to collect wage taxes during the period in question, 2007 through 2011.

At the time, municipalities collected earned income taxes from people employed in their towns, and passed the money on to the workers’ home municipalities.

Centax went out of business in 2012 and obtained a court order prohibiting lawsuits as part of a receivership action.

Iversen later added a second bond insurance company, Fidelity Deposit Co. of Maryland, to the list of defendants.

The parties discovered recently that “a small portion” of the disputed taxes was forwarded to Sharon School District, and school officials have been part of the settlement discussions, Stedman said.

“Sharon School District has not yet been added as a party to this case, as an attempt has been made to resolve the matter between the parties without having to engage in further litigation,” he said.

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