New London sends list of past-due tax accounts to outside agency
New London — The city will look to an outside collection agency in an attempt to collect some of the more than $660,000 in past-due taxes.
The unpaid motor vehicle and personal property taxes, along with penalties, from 2016 to 2019 are not written off but instead shifted to a so-called suspense list. Municipalities regularly use a suspense list, required by state statute, to help clear city financial records and ensure the city is not overestimating its anticipated revenue.
New London Tax Collector Samantha Krakowiak said the thousands of accounts on the list include companies that are now out of business, accounts where people are deceased and accounts where the city is unable to locate an individual after numerous notices and demands were mailed.
The City Council reviewed and approved the suspense list at its meeting Monday. Councilor John Satti questioned the amount of money the city is giving up to the outside agency.
The suspense list is sent to American National Recovery Group, a collection agency that has further reach and more resources to find people who have moved. The agency collects 15% in addition to the outstanding amount owed from each account as a service fee, Krakowiak said, without cost to the city. The group last year collected $95,452, and this fiscal year $96,463, from the suspense list for the city.
Some of the past-due taxes, if collected, would be given up to an outside auditing firm: Tax Management Associates. The group was hired by the city in 2018 to help boost tax revenues by handling the labor-intensive job of personal property audits of city businesses. Tax Management Associates would retain 30% of the overdue taxes and penalties for its work with companies like Logistec USA.
Logistec, which ran operations at State Pier until 2019, is one of the largest accounts on the suspense list. City records show that Logistec owes the city $357,128 in past-due taxes and penalties. The company was up to date in its taxes until new assessments were issued in December 2020.
The new outstanding amounts are due to tax increases determined by an audit conducted by Tax Management Associates.
City Assessor Donna Ralston said it appears, based on the audit of Logistec, that the bulk of the underreporting was associated with unregistered motor vehicles at State Pier. Logistec was informed of the audit in March 2019 and in July 2020 was sent the results of the audit.
A representative from Logistec could not be reached for this report.
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