Taking credit for taxes

A growing number of Walker County, Texas, residents are using credit cards to pay their property taxes. To accommodate the demand for the service, last year, the County Appraisal District (CAD) switched its tax payment system and improved operations for accounting staff.

In fall 2004, Carolyn Brown, financial director for CAD was at her wit’s end. She wanted residents to continue paying taxes by credit card, but the demand for time and staff resources was difficult to justify. For example, the card service made lump deposits of customers’ payments and convenience fees into the CAD bank account. Then two convenience fees were debited from the CAD account while other fees were invoiced monthly. Customer payments were posted on a Web site for CAD to download, but their timing was inconsistent.

Administration and reconciliation issues created headaches for CAD staffers particularly during December and January, the busiest tax collection months of the year. During those months, CAD staff would spend two to two-and-a-half days to complete all the accounting tasks for just one day’s worth of credit card payments. At times, two staff members had to help customers make payments through the system.

In January 2005, Walker CAD contracted with Stamford, Conn.-based Official Payments to host an online and telephone payment system. The company collects the payment information from residents and sends CAD the data to credit payments to the accounts. CAD staff no longer manually research accounts before payments can be credited. “They split the convenience fee at the time of the transaction so that the money we receive is the full amount of the payment,” Brown says. “We are never debited or invoiced. [Transaction reports arrive] via a daily file with standardized cutoffs and all of the transaction details we need to credit accounts.”

With the new system, Walker CAD is saving time and money in staff resources, and residents are paying smaller convenience fees. “We used to have customers who tied up my staff for 45 minutes at a time trying to pay by credit card,” Brown says. “Now when someone has a question, they call [the company].”

On the back-end, Brown says the time savings are even more apparent. “I was able to setup the system so that I get a full set of account numbers and contact information for each payment,” Brown says. “It used to take me hours to reconcile all of the receipts. Now it is basically automatic.”

With tax bills due at the end of January, Brown expects a significant number of people to take advantage of the new credit card service. “We just sent out bills in October, and already we are seeing a steady stream of payments coming in from credit cards. The system is working very well, and we anticipate that handling these payments electronically will save us even more time as we get closer to the due date,” Brown says.