Scranton files another batch of lawsuits seeking to recoup unpaid business privilege and mercantile taxes

Jim Lockwood, The Times-Tribune, Scranton, Pa.
·3 min read

Jan. 6—SCRANTON — The Scranton tax collector is suing 12 more businesses, claiming they owe business privilege and mercantile taxes to the city and school district.

These lawsuits filed last month in Lackawanna County Court by Scranton Tax Collector Cathy Nealon Wechsler followed a first batch of lawsuits filed in September against 13 other business companies. Wechsler is the director of the city's Single Tax Office.

The lawsuits, which are identical, are part of the office's new, aggressive approach to collect prior business privilege and mercantile taxes.

Some defendants have paid arrears or made arrangements to pay, she said. A Times-Tribune report in September about the first group of lawsuits prompted several other businesses to come forward to pay their business privilege or mercantile taxes to avoid getting sued, she said.

"It's been very successful," Wechsler said.

The office expects to file a third set of another dozen or so lawsuits soon, Wechsler said.

A city ordinance that authorized business privilege and mercantile taxes dated to 1979, and the Single Tax Office collects these taxes for the city and Scranton School District, the lawsuits say.

For 2021, the city eliminated business privilege and mercantile taxes and swapped them with payroll taxes. The school district is making the same switch for this 2023 budget year.

The lawsuits seek unspecified amounts of taxes owed. Amounts of delinquent taxes owed to the city and school district are undetermined because these annual taxes are based on a business's gross receipts for a prior year.

Before the payroll tax swap, the city required every entity that was subject to business privilege and mercantile taxes to register with the tax office and annually submit a tax return on a form stating the amount due and to pay that amount, according to the lawsuits.

The 12 businesses sued in the second batch of lawsuits include:

DeFreitas Construction, 1415 Luzerne St. Efforts to reach this firm were unsuccessful. Wechsler said this company has made arrangements with the tax office to pay arrears.

Mulberry Medical Center, 1405 Mulberry St. The firm's attorney, Harold Ruvoldt, said his client had not received the lawsuit, but if the firm owes any taxes, they will be paid.

Shamrock Construction Inc., 306 N. Main Ave. Efforts to reach Shamrock were unsuccessful.

Trunzo Roofing & Siding, 1648 Dickson Ave. Owner Frank Trunzo declined to comment.

T.S.E. Inc. General Contractor, 347 Main St., Dickson City.

Shea Place Development LLC, Rear 347 Main St., Dickson City. Attorney Frank Tunis Jr., who is representing both T.S.E. and Shea Place, filed separate, formal replies in court on Dec. 29 denying the allegations and arguing the lawsuits are barred on several legal grounds. The lawsuits should be dismissed because the business privilege and mercantile taxes are "illegal, unconstitutional and/or otherwise not legally enforceable," according to Tunis' replies.

Wolff Plumbing & Heating, 423 Jefferson Ave. Efforts to reach Wolff were unsuccessful.

A Better Today, 1339 N. Main Ave. A representative of A Better Today declined to give a name or comment.

Butter's Barbershop & Salon, 831 Pittston Ave. Efforts to reach the business owner were unsuccessful.

Christian Child Cares, 731 Oak St. Director Janet Wentum declined to comment.

ALF Family Dentistry, 1020 N. Irving Ave. This firm's attorney, Joseph Colbassani, filed a response in court on Dec. 28 saying there is no legal entity called ALF Family Dentistry, the lawsuit is "a legal nullity," the tax office fails to state a valid claim and the taxes at issue were illegal from their inception.

Attorney John R. Williams Jr., Williams Law PC, 700 Vine St. Efforts to reach Williams were unsuccessful.

Contact the writer:

jlockwood@timesshamrock.com; 570-348-9100 x5185;

@jlockwoodTT on Twitter.