About those echeck tax fees

Thanks for allowing me the opportunity to respond to the Mike Reno letter of Jan. 4. Over these past 14 years, we have tried hard in this office to be responsive to you, our customers. We have worked to improve all our processes to make paying property taxes more efficient and less costly.

Here are several thoughts addressing the letter to the editor:

1. The County Treasurer is charged with collecting property taxes for all the taxing districts within the county. There are 47 political subdivisions within Kootenai County with budgets totaling $154,528,184 for 2014, the latest property taxes billed. There are also 84,349 taxable parcels within the county. These parcels have a combined taxable value of $11,472,112,065 from which levy rates are calculated and property taxes assigned.

2. How much does it cost to process an incoming snail mail check? During the busy months here in the office when taxes are due, December and June, we contract with our bank to process incoming payments by check. That process is called "lockbox." We receive the mail from the Post Office, put the mail into shipping boxes, and overnight the boxes to our bank. Through the "lockbox" process, the bank opens the mail, deposits the money in our account, and creates a database which we can upload into our taxation software. This means the money received via snail mail into our office is deposited into our bank account the next day, a one day turnaround. The cost of this process is about 15 cents per check.

3. The county does not charge a "convenience fee" to pay property taxes by echeck. We have contracted with a third party to collect payments from those individuals who choose to pay by either echeck or credit/debit card. The county does not pay for this contract, so no tax dollars are spent. The "convenience fee" for an echeck is $2.49 per check and 2.49 percent for credit/debit cards is charged to the user. Those fees are typical of the cost of doing business. If you use your credit card to purchase an item in a store in town, the store will be charged by the credit card company for the "privilege" of accepting the card. In other words, the store will lose that cost from each sale. The third party collects both the tax and the "convenience fee," then pays the county the exact amount of taxes due and keeps the "convenience fee" as their payment for this service.

There are several options for paying your property tax. Idaho statute 63-901 states "All property taxes must be paid in lawful money of the United States." In the year 2008 "Notwithstanding the provisions of this section, a county may allow for payment of taxes by use of a debit card, credit card or electronic funds transfer" were added. We have always accepted cash, checks, and money orders at the counter. We have also always accepted checks through the mail. There is no additional cost to the taxpayer for doing business the traditional way.

Money received from the third party is deposited into our bank account by electronic funds transfers. Once these funds are received, our staff must upload this information into our taxation software, the same process used for the "lockbox."

The bottom line for consideration of Mike Reno's letter is "does it make economical sense for the county to cover the cost of echecks and debit/credit cards?" The answer is "no." The folks who choose to make property tax payments via the third party must cover the additional cost. The alternative is to increase the levy rate to cover the increased cost - but that way everyone pays for the folks who choose to use echeck or debit/credit cards. The choice is yours.

Tom Malzahn is Kootenai County treasurer.