City leaders in McKeesport traced $1.4 million in unpaid taxes to a company that did business there over multiple years.
A tax collection audit firm discovered the loss, but declined to name the company responsible. In a statement Wednesday, Philadelphia-based eCollect Plus said the company is publicly traded and not local.
A partner at eCollect Plus, Michael Hill, said “a multitude” of other companies also owe unpaid taxes to McKeesport. It’s common for municipal tax revenues to go missing, usually due to inadvertent errors in tax reporting, according to Hill.
“When you’re talking about businesses that aren’t the traditional brick-and-mortar businesses, they can kind of fall between the cracks as far as reporting their taxes,” he said.
Hill estimates that the recently discovered $1.4 million amounts to almost a year-and-a-half worth of revenue for McKeesport. Attorneys at eCollect Plus will assist McKeesport in recovering the funds.
The east Pittsburgh suburb has been struggling financially for years.
“It’s a working-class town that typifies an older Pittsburgh steel town that faces the challenges of a declining tax base, with businesses leaving,” Hill said. “And they have the double-edged sword of attracting businesses in, but yet collecting taxes that they know are out there.”
Last year, McKeesport raised local taxes for the first time in 25 years and sold its municipal sewer authority to the privately owned Pennsylvania American Water in 2016.
The measures are two of several efforts by city leaders lately to avoid being designated as financially distressed under state law.