GATES MILLS — Due to a delay in the Central Collection Agency processing information, the village’s switch to the Regional Income Tax Agency has also been pushed back. Gates Mills was supposed to switch from CCA to RITA for its municipal income tax collection by June 30, but Gates Mills Tax Administrator Bob Reitman said that the final transfer could take place in August or September.
Mr. Reitman said that the COVID-19 pandemic has caused a delay in Cleveland processing tax returns for the first half of the year. He said that CCA is operating at full strength two days a week and is behind in processing information. Mr. Reitman said that CCA is getting returns and cashing checks but has a backlog of data entry to complete. The question for Gates Mills, he said, was whether to hold CCA to a hard deadline of having the switch to RITA complete by June 30. Ultimately, the village decided to do nothing and allow the transfer to take place later this summer.
“Gates Mills will get all of its money. We’ll have a complete record at the end of the year,” Mr. Reitman said. “It’s not a crystal-clear change at the end of this month. It’s going to take time to fall into place.”
The process to switch from CCA to RITA for income taxes is simple, he said. CCA sends its electronic data to RITA, RITA enters the data into its system, then the village is “up and running” with RITA, Mr. Reitman said.
At the council meeting on June 9, Councilman Jay “Chip” AuWerter asked if the flow of funds will be affected. Mr. Reitman said that the most complicated data is from the current year and the flow of funds should be substantially the same. The only difference that residents should notice is the return address on their taxes, he said.
Mr. Reitman estimated that the village has been working with CCA for at least 20 years but has been considering switching to RITA recently because it offers more comprehensive services. In particular, he said that the village needs to follow up on unpaid taxes.
“We don’t have a gigantic problem but we have a problem,” he said. “We felt an obligation to more enforcement.”
One option, according to Mr. Reitman, was to hire a law firm to handle the delinquent taxpayers. Some of the people who are not paying income taxes reside in the village while others work in the village, such as at Gilmour Academy, the Chagrin Valley Hunt Club and Sara’s Place. He said that there are about 60 delinquent taxpayers.
Another option would have been to use the current village staff and volunteers to find and prosecute delinquent taxpayers. Mr. Reitman said that Gates Mills is a small village with a modest staff and limited volunteers. It would be a “very onerous task” to become a tax collection agency, he said. The office of the mayor, the council members, the treasurer and the tax administrator are volunteer positions.
Mr. Reitman said that CCA could admonish delinquent taxpayers, but RITA has the legal department to pursue the delinquencies and collect the taxes. Councilwoman Sandra Turner said that switching from CCA to RITA is a great change for the village.
Many other local communities already work with RITA, including Bentleyville, Chagrin Falls, Chardon, Hunting Valley, Moreland Hills, Orange Village, Pepper Pike, Solon and Woodmere.
“I think in this instance we did the right thing,” Mr. Reitman said.