Tax Day falls on April 18 this year, and as the deadline approaches, most taxpayers in Allegheny County will file their local return with a company called Jordan Tax Service. The 90-year-old firm handles tax collections for scores of municipalities throughout the region, but its dominance remains a mystery — and source of frustration — for some taxpayers.
Entrepreneur Melinda Su En Lee said she was surprised to learn of Jordan Tax Service when she registered her startup, Parcel Health, in the city of Pittsburgh. The three-year-old business, which makes compostable medication packaging, had previously been based in the AlphaLab Health accelerator in the borough of Bellevue. Lee relocated to the city last fall after receiving investment from the Urban Redevelopment Authority of Pittsburgh.
The URA required the move as a condition of the funding, and it meant that Lee would have to begin to pay city taxes.
“I was very surprised to find that I also had to register with this other entity that’s not part of the city of Pittsburgh. And I looked it up [online], and it was like Jordan Tax Services,” she remembered.
Despite Lee's confusion, Jordan has done business with the city for years. In fact, Jordan's website says the firm serves more than 85 municipalities and authorities, plus 30 school districts and Allegheny County. Since its founding in 1932, the company has established offices in McMurray, Bethel Park, and Downtown Pittsburgh. In addition to taxes and delinquent taxes, it handles sewage and garbage fees for local governments.
As an employer, Lee had to set up an account with the firm to withhold earned income taxes for her staff. So she went to Jordan's website and found a black and gold interface whose bare-bones appearance hearkens back to the early 2000s. Lee said there was no way to create a business account through the website.
“So, I start calling [Jordan's] help line several times a week,” she said. “I try calling at different times, and nobody picked up.”
She said no one responded to her voicemails either. Jordan similarly did not return any of 90.5 WESA’s phone calls and emails over the past month.
Lee, however, managed to get into Jordan's system with the help of her accountant, though she’s still annoyed.
“If I wasn't persistent about it, this wouldn't have been able to be resolved, and [Parcel] would have been delinquent on the [earned income] tax,” she said.
A friend to local government
Lee is not alone in her dissatisfaction: There are entire Reddit threads devoted to the same topic. Taxpayers complain of poor customer service, late bills resulting in late fees, and clerical errors. Some even say they didn’t pay their local taxes for years because, when they got mail from Jordan, they thought it was a scam.
In reality, Jordan carries out an essential government function for localities throughout the region. University of Pittsburgh public policy and management professor George Dougherty said it’s too expensive for each of these entities to gather their own taxes.
“So many of them are incredibly small,” he said, “and in essence there are fiscal savings from the fact that larger firms can spread the costs of collecting an individual bill out across hundreds of thousands of customers as opposed to, in some cases, hundreds or thousands.”
Scott Township, just south of Pittsburgh, outsourced the collection of real estate taxes to Jordan last year. Township manager Denise Fitzgerald said the local government now saves $270,000 dollars annually on property tax administration — a 90% reduction in costs.
“We haven't had a tax increase in a number of years, and we try not to have tax increases. So, we always try to find different ways to save money,” Fitzgerald said.
Five municipal clerks once handled collections in Scott, but most of them have retired, Fitzgerald said. Today, just two clerks remain, she said, and their roles have changed now that Jordan processes real estate taxes for Scott, in addition to earned income and local services taxes.
“It's more efficient for me,” Fitzgerald said of Scott's contract with Jordan. Jordan gives “us the reports with the checks, and it's pretty seamless for me.”
Staying local
In Pennsylvania, municipalities and school systems vote within larger districts to decide who will collect their earned income tax revenue. Allegheny County consists of four districts, and Jordan serves as the collections agency for two of them: the Allegheny Central Tax Collection District, which consists of the city of Pittsburgh and Mt. Oliver Borough, and the Allegheny Southwest Tax Collection District.
The other two districts, Allegheny North and Allegheny Southeast, contract with another private company called Keystone Collections Group, according to the Pennsylvania Department of Community and Economic Development. The government agency reports that about a dozen of the state's districts work with Keystone. Roughly 30 others use the for-profit firm Berkheimer Tax Administrator, while the remaining 21 have created their own county-level or nonprofit tax bureaus, according to the department.
Mary Abbott, once the treasury manager for Mt. Lebanon Township, has chaired the Allegheny Southwest tax district since it formed in 2009. The district covers airport-area suburbs, the South Hills, and some Mon Valley communities. Abbott said the district's delegates originally decided it would be more efficient to outsource collections. To them, she said, any effort to organize their own tax bureau would have involved too much politics and expense: They would have had to choose a location, hire staff, purchase software, and cover other costs.
So instead, the southwest district considered bids from several private firms, including Keystone and Berkheimer, Abbott said.
“What we liked the most was that Jordan was staying local,” she said. “And so we knew that we would be able to get in touch with them. They were going to be a presence.”
Jordan had already served many of the municipalities in the tax district, and Abbott said those governments were satisfied and comfortable with Jordan. She said the firm's pricing also was competitive.
Under its contract with the southwest district, Jordan earns a 1.8% commission on all collections, Abbott said. In 2022, the company collected about $178 million in earned income tax revenue within the district, resulting in a total commission of approximately $3.2 million, according to Abbott. Each municipality and school system pays Jordan for its share of revenue.
Abbott said the terms of the district’s agreement with Jordan have not changed since it began in 2012, and she expects the relationship to continue. “We are in discussions for a new contract, and I don't foresee any change with that one,” she said. “We're very happy with the way things have gone with [Jordan].”
But to appease taxpayers who remain dissatisfied, Dougherty, of the University of Pittsburgh, said change must start with the governments that keep hiring Jordan.
“If they were to push these firms to provide better customer service, or at least clarify who's responsible for what aspect of customer service when it comes to paying government taxes and fees, then I think that would alleviate much of the frustration,” he said.
While tax collectors are naturally unpopular with taxpayers, Dougherty said municipalities can demand improvements. To get them to act, he said, residents and business owners need to make their concerns heard.
