Council Rock May Eliminate the Occupation Assessment Tax

The occupation assessment tax may be a thing of the past for Council Rock residents.

The Council Rock School Board next month will consider putting a referendum on the November ballot that would ask voters to replace the tax with an equivalent increase in the earned income tax rate.

The move is being considered due to the high cost of collection and overhead of the occupation assessment tax, district officials explained. The district is also looking to do away with the $10 per capital tax, because 30 percent of those funds go simply to collecting the money.

Board Member Bill Foster, a member of the district’s Finance Committee, said the per capita and occupation assessment taxes are inefficient and complicated to collect. 

“They are nuisance taxes,” Foster explained, adding they are both a nuisance to the taxpayer and to the tax collector.

But if the district wishes to do away with the occupation assessment tax, it must have a referendum on the general election ballot. The board is expected to vote on whether to place the question on the ballot during its July 18 meeting. 

A public hearing on the issue, required by Pennsylvania law, will be held immediately before the 7:30 p.m. meeting. Officials have not yet announced the start time for the hearing.

If the board elects to place the question on the ballot, Council Rock voters will be asked if they approve of replacing the occupation assessment tax with a .17 increase in the earned income tax. The current earned income tax rate is 0.50 percent.

The average Council Rock taxpayer receives three tax bills—real estate, per capita and occupation assessment—resulting in a $6.15 collector fee per residence.

The tax collector receives $2.05 compensation per bill. Each municipality in the Council Rock School District has a different tax collector, who is elected by its residents.

According to Foster’s analysis of the issue, the $10 per capita only tax bills that are sent to more than 21,000 households come with an exceptionally high price tag to execute. In addition to the tax collector compensation for each bill, the district must pay the cost of printing, envelopes and postage. “That's incredible overhead,” Foster noted. 

The occupation assessment tax, which is calculated based on the residents’ occupation, is confusing to collect, Foster said. There is a high incidence of delinquent and incorrect bills, fines, re-mailing of bills and phone calls, Foster explained. 

According to data provided by Foster, last year, the district sent out 28,399 Real Estate tax bills and collected $130,990,994. Tax collector fees were $58,218.

From the 55,300 Per Capita and Occupation Assessment tax bills that were distributed, the district collected $4,603,481 and tax collector fees were $113,365.