Local Taxpayers Fairness Act Introduced

Arlington County, Virginia, June 26th – At today’s public meeting of the Arlington County Board, Congressman Jim Moran, Virginia Democrat, announced the introduction of the bipartisan “Local Taxpayers Fairness Act,” legislation that would use an individual’s federal tax refunds to cover any delinquent local tax debt. The bill brings fairness to the current system which results in punctual taxpayers having to pay more in local taxes to cover those who are delinquent.  

“It’s not fair for law-abiding taxpayers to have to cover the cost of those who skirt the law,” said Moran. “This legislation brings fairness to the system, allowing local governments to recoup unpaid taxes in the same way state governments do, by directly receiving the amount owed from federal tax refunds.”

This legislation mirrors existing law for states which allows them to collect unpaid local taxes through direct access to the delinquent individuals’ federal tax refunds. A number of overdue debts are currently collected using federal tax refunds. They include: child support, money owed to the federal government, and unpaid state taxes. 

Moran added, “The recession has left local governments cash-strapped. In Arlington County alone, enacting this legislation would bring in over $2 million per year. That’s no small amount considering the options for local governments these days: cut services or raise taxes on those who pay them on time.”

For localities in Virginia, the program is estimated to bring in between $65-$70 million in revenue in the first year.  As an example of how the law would work, in 2008, the Commonwealth of Virginia received over $22 million in unpaid state taxes through this mechanism. For Arlington County alone, unpaid tax revenue that would be collected under the bill would range from $2,082,900 to $2,777,200.

Original cosponsors include:  Connolly (D-VA), Goodlatte (R-VA), Wittman (R-VA), Wolf (R-VA)

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