PORTLAND, Maine — Maine is hoping that Florida debt collection lawyers will help it get out-of-staters to cough up millions of dollars of unpaid taxes.
Over the years, people and businesses outside of Maine have accumulated nearly $17 million in tax bills that remain unpaid, according to the Department of Administrative and Financial Services, which recently renewed its longstanding contract with Tampa Bay-based law firm Marcadis Singer PA.
The tax debt typically comes from out-of-staters failing to pay Maine income and sales taxes, according to department spokesman David Heidrich.
The trouble is that Maine tax collectors can only operate within the state. If collections calls and monthly bills don’t do it, the state turns to the courts to try to get debtors living elsewhere to pay up. The process begins with a Maine court issuing a warrant to collect from someone. The state sends these notices to lawyers around the country that it hires to chase down unpaid taxes, according to a financial services department.
“There is no alternate method of forcing involuntary payment of overdue taxes,” the department said.
That’s where firms like Marcadis Singer comes in. In a two-year contract, the state will pay the firm $20,000 up front to do what Maine Revenue Services legally can’t — go after debtors beyond state borders. But the firm could have an even bigger payday if it collects. The lawyers keep one third of whatever they collect for Maine, a standard rate for such a service, according to the department.
The department did not know how Maine’s non-resident tax debt compares to that of other states or provide amounts collected and owed in specific states, but its use of debt collectors has had some success.
This year the running tally of out-of-state tax debt accrued in past years is $16.7 million. It’s down from $24.1 million in the 2016 fiscal year, and the debt averaged $20.3 million in the four years prior to that, according to the department. Since fiscal 2012, when the debt was $19.4 million, lawyers from around the country have collected more than $3.9 million from non-residents, Heidrich said.
Lawyer Gilbert Singer, a partner at the firm that bears his name, has represented Maine for 18 years, according to a department notice waiving competitive bidding on renewing his contract. The Florida debt collector is currently handling 47 cases against parties that owe Maine money and there are debtors in another 22 states, the department said.
Messages left for the Florida law firm were not returned, but the company’s voicemail warned that “this is an attempt to collect a debt and any information obtained will be used for that purpose.”
Correction: A previous version of this story misstated the duration of Maine’s contract with Marcadis Singer PA. It is two years.