Requires that charges imposed by collection contractors for the collection of taxes due the Dept. of Revenue be deducted from the total amount of money collected from a tax debtor (OR -$3,000,000 GF RV See Note)
If enacted, HB 1076 will fundamentally alter the financial arrangements between the tax debtors and collection contractors. By prohibiting contractors from charging tax debtors any additional fees for collection, it aims to enhance fairness in tax collection practices. The bill's passage could lead to a more efficient tax collection process, as tax debtors would not be deterred by additional financial burdens when settling their debts. Furthermore, it may compel collection contractors to moderate their fees, knowing that they cannot directly charge the debtors and must instead negotiate contracts that align with the DOR's budget.
House Bill 1076 aims to amend the provisions governing the collection of state taxes, both in-state and out-of-state, by changing how charges by collection contractors are managed. The bill requires that any additional charges imposed by collection contractors for the collection of taxes to be deducted from the total amount of money collected from the tax debtor. This effectively removes the burden of these additional charges from the tax debtor, shifting the financial responsibility for these fees onto the Department of Revenue (DOR). This change is intended to make the debt collection process more equitable for taxpayers.
The sentiment surrounding HB 1076 reflects a desire for more transparent and fair practices in tax collection. Supporters argue that the bill protects vulnerable taxpayers from excessive fees that can complicate their financial situations, promoting a more responsible approach to tax collection. However, there may also be concerns from collection contractors about their potential revenue loss and the overall sustainability of their operations if they cannot charge fees directly to debtors. This creates a mixed response, with proponents praising consumer protection while critics warn of potential unintended consequences for the operational viability of debt collectors.
Notable points of contention regarding HB 1076 revolve around the financial implications for both the Department of Revenue and the collection contractors. Critics argue that by removing the ability to charge additional fees, collection contractors might either limit their services or increase the costs embedded in contracts with the DOR, which may ultimately reduce the effectiveness of tax collection efforts. Furthermore, the bill could face scrutiny regarding its implementation and oversight, with questions about how the DOR will handle contractor compensation moving forward, which remains to be seen.