Businesses behind on their sales tax payments could soon see their names published online as part of an effort to collect on delinquent accounts.

During a July 28 meeting, the borough assembly unanimously passed the first reading of an ordinance designed to tighten enforcement of the sales tax code. If approved in a second reading after a public hearing, the new rules will allow officials to post delinquent accounts on the borough website and levy hefty fines on business owners who ignore financial audits.

Under the proposed ordinance, the borough gains the authority to list businesses that fail to turn in tax filings or owe back taxes, penalties and interest. The public listings will display the company name, unpaid reporting periods and delinquency status.

According to the ordinance, warning notices will not be legally required before a business name goes on the website. However, Borough Finance Director Rob Marshall will be required to remove listings immediately once an account is paid in full.

Sales taxes not paid within a month of the due date are charged a 5% penalty for the first month and a monthly interest rate (compounded) of 1% from the date of delinquency. The borough expects to collect about $4 million in sales taxes this fiscal year — its largest source of revenue.

Marshall said the borough generally sees a balance owed of about $70,000 on delinquent accounts.

In addition to public listing of delinquent accounts, the measure adds teeth to tax audits. 

Businesses would be required to supply requested receipts, ledger books and supporting records to the sales tax inspector in a timely manner. Failing to submit those files within 30 days of receiving a written notice will result in a $500 civil penalty. The borough will also retain the right to bill non-compliant business owners for the labor costs tied to delayed audits.

Borough Manager Mason Villarma said the updates are intended to level the playing field for law-abiding business owners, increase public transparency and safeguard borough funding.

“The proposed amendments strengthen the borough’s ability to administer and enforce its sales tax code by providing additional compliance tools for delinquent taxpayers and businesses that fail to cooperate during sales tax examinations,” according to Marshall’s report to the assembly.

During the meeting, Assembly Member Jim DeBord cautioned that public naming should strictly serve as a last resort after all communication attempts fail.

“I just want to make sure that we’re doing 1000% of all that we can, to make sure that the delinquent account holders are contacted before we print any names,” he said.

Marshall reassured DeBord that staff will exhaust every outreach process before publishing any business details online.

Residents will have an opportunity to weigh in on the proposed ordinance during a public hearing scheduled for the Aug. 25 assembly meeting.