Salisbury Considers Real Estate Tax Installment Plan

Editor's note: This is an edited version of a story that appeared earlier.

The might soon begin to allow all taxpayers to pay real estate taxes by installments because of a new state law that requires districts to allow small businesses to pay in up to four installments.

As of June 30, 2012, businesses with less than 50 employees must be allowed to pay their real estate taxes in four sums instead of one annual payment, according to Christine Stafford, Salisbury's business administrator.

"It could create a cash flow problem for some districts," Stafford said.

Stafford said at the school board's Nov. 14 operations committee meeting that differentiating between small and large businesses would be too time consuming and require more staffing than the district has to bill everyone properly. Therefore, it would be more efficient for the district to allow all taxpayers to make installment payments, she said.

"Currently the Salisbury policy for homestead/farmstead properties allows three payments.  Most likely that same option, including due dates, will be given to the small business qualified properties, however that decision has not yet been made and is not required until June 30," Stafford said in an e-mail. 

"Regardless of the number of payments ultimately selected, the payments must occur between July 1 and December 31 of a given year and would not be considered 'quarterly' in the traditional sense," Stafford said.

The Pennsylvania Association of School Business Officials has formed a statewide task force to interpret the new law, which was tacked on to the budget the state passed over the summer. Members have debated whether a franchise store in a mall means that the mall qualifies as a small business, and whether an apartment building with a four-person maintenance staff would qualify the property owners as small business owners under the law, Stafford said.

So far the consensus seems to be that it's better to open the installment payments to everyone to ward off legal challenges that could cost district valuable time and legal fees, she said. Installment payments are currently only an option for homesteaders and farmsteaders.

Stafford said she thinks it is unlikely that many large businesses will take advantage of installment payments because they would lose the 2 percent discount they receive by paying their bills all at once.

The next operations committee meeting for Salisbury school directors will be at 6:30 p.m.  Wednesday, Dec. 14, followed by the board's regular monthly meeting.