Consideration and Approval of Transaction Privilege (Sales) Tax Write-offs: Delinquent and uncollectable accounts for Fiscal Year 2015. (2015 Transaction Privilege (Sales) Tax Account Write-offs)

Generally accepted business practices allow for the write-off of uncollectable accounts annually. City staff has exhausted collection efforts on the eligible accounts and will no longer actively collect on them. Where possible, any amounts due are applied to a taxpayer's credit, applied to a property lien, or applied to the state run debt set-off program. As a result, debt that has been previously written-off is occasionally paid some time later to clear a taxpayer's outstanding debt. Pursuant to state law, taxpayer delinquent account information is not subject to public release.

None that is unbudgeted. Each year, the City anticipates that there will be uncollectable transaction privilege (sales) tax accounts and reserves an amount at year end for these accounts.

Improve effectiveness of notification, communication, and engagement with residents, neighborhoods and businesses and about City services, programs, policies, projects and developments.

No.

• Authorize the write-off of uncollectable transaction privilege (sales) tax accounts.
• Do not authorize the write-off off uncollectable transaction privilege (sales) tax accounts and continue collection efforts.

Before any account is eligible for write-off, staff must initiate collection efforts on each account after it becomes delinquent. When collection efforts are exhausted, the account is eligible for write-off. If possible, any amounts due are applied to the taxpayer's credit, applied to a property lien, or applied to the state run debt set-off program. Application through any of these means may lead to the recovery of some of the delinquent amounts in the future.

In FY15, the City estimates to receive $40.6  million in transaction privilege (sales) taxes, transportation taxes, BBB taxes, and franchise fees. The write-offs are 0.232% of the total estimated amount of revenues. Each of the write-off accounts no longer operates in Flagstaff.

Pursuant to state law, taxpayer information is confidential and information is not subject to public release.

Transaction Privilege (Sales) Tax Account Write-Offs (5 Year History)

Write-Off Year	Amt of Write-Off	Annual Amt Collected	% of Amt Collected
FY15	$94,271.80	$40.6 million	0.232%
FY14	$140,569.91	$35.3 million	0.400%
FY13	$100,866.05	$34.4 million	0.293%
FY12	$113,481.22	$33.0 million	0.344%
FY11	$109,121.32	$31.1 million	0.350%

Staff, using billing statements, letters, and telephone calls, has worked the write-off accounts. When taxpayer's fail to make payments, they are denied access to future City services.  When possible, the amount owed is applied to the taxpayer's credit, applied to a property lien, or applied to the state run debt set-off program.

It is sound financial management practice to reduce assets to reflect their true valuation. Failure to write-off accounts deemed uncollectable overstates the asset value of the City.

Inform. Yearly write-offs ensure that the City is following generally accepted business practices.

None.