HomeMy WebLinkAboutTR-97-92 THE CORPORATION OF THE TOWN OF NEWCASTLE
REPORT
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Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File# "
Date: November 16, 1992 Res. #f:i�-
Report#: TR-97-92 Fil #: By-Law#
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Subject: TAX PAYMENTS BY MAIL - PENALTY CHARGES
Recommendations:
It is respectfully recommended that the General Purpose and
Administration Committee recommend to Council the following:
1. That report TR-97-92 be received; and
2 . That Council endorse the existing procedure detailed in
Report TR-97-92 respecting tax payments made by mail and
applicable penalty charges .
3 . That Mrs . Brenda Towler be advised of Council 's decision
and be provided with a copy of report TR-97-92 .
BACKGROUND & -COMMENTS
Currently, the tax department's procedure with respect to application
of penalty and interest on tax arrears is to charge penalty and
interest on outstanding taxes on the first day of each month at the
maximum legislated penalty/interest rate of 1 1/4% per month. This
information is stipulated in the Town's levying by-law each year and
is also indicated in the text of the tax bill. This applies to
payments made over the counter the 1st day of the month in addition to
payments received through the mail. The instalment due date is
normally in the third week of the month thereby allowing an average of
a 7 day grace period before a penalty is applied.
It is not uncommon for this procedure to be questioned with regards to
the payments made through the mail. Any mail physically received in
the tax department on the first of the month is processed as a late
payment. However, the argument has been made by taxpayers that an
envelope post-marked in the month prior should constitute a payment of
the previous month regardless of when received.
A specific example which has arisen involves a Newtonville taxpayer,
Mrs. Towler. She has indicated she mailed her cheque for her
September 25th instalment on September 22, 1992 . Payment was received
by mail on October 1, 1992 and as a result penalty was charged for the
month of October. Mrs . Towler feels that her payment was mailed in
plenty of time and cannot help the fact she has no control over the
service provided by the Post Office.
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TR-97-92 Page 2
The tax department has surveyed the area municipalities and has
gathered information on the federal and provincial government payment
policies .
The following are those results:
TYPICAL INSTALMENT PAYMENT RECORDED ON DATE:
DUE DATE RECEIVED POST-MARK
Town of Newcastle Third week X
Township of Scugog Middle of X
Fourth week
Town of Pickering Third week X
Town of Ajax Last Wednesday X
of the month
Town of Whitby * Middle of X **
the month
City of Oshawa Last working X
day of the month
Federal Government N/A X
Provincial Government N/A X
* Penalty, charged first day of default and first day of month
** Excludes Lawyers submissions
RECOMMENDATIONS
It is recommended that the Council of the Town of Newcastle endorse
the continuation of the existing practice of allowing a grace period
from the due date to the first of the following month before
application of a penalty and interest and the processing of payments
on the date received rather than by the post-mark on the envelope.
The current system deters taxpayers from mailing payments too late
into the month. The grace period currently offered after instalment
due dates is considered to be ample. In addition, post-dated cheques
are accepted and this method of payment may provide a safe-guard
against possible mail problems currently experienced by some
taxpayers .
Respectfully submitted, Recommended for presentation
to the Committee
'e A. Marano, H.BSc . ,A.M.C.T. Lawrence E. Kots f'
Treasurer Chief Administra iC,e Officer
MAM/RS/ges
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