The Setoff Debt Collection Act allows the South Carolina Department of Revenue to collect any delinquent debt owed to certain public bodies. DOR deducts the amount of the debt from the debtor's state income tax refund.
Participants of the Municipal Association's Setoff Debt Collection Program submit claims to the Association which forwards them to the Department of Revenue each December. If a debt is set off, DOR collects a $25 fee, the Association receives a $25 administrative fee and the participating city can additionally collect a fee up to $25. All fees are paid by the debtor.
Using software provided by the Association, participants can submit an array of delinquent debts, including but not limited to, utility bills, garbage fees, property taxes, court fines and student loans. Business license taxes, hospitality taxes, and tourism and development fees in which the ownership is a sole proprietorship can also be submitted for any unpaid balance.
DOR must have the debtor's social security number to set off the state income tax refund. The Association can assist entities with Social Security number searches for a minimal cost.
"The program has been very successful for our participants," commented Miriam Hair, executive director of the Municipal Association. "Since the program's inception in 1993, we have helped participants collect more than $40 million in delinquent accounts. In 2012, a total of 14,942 debts amounting to about $3 million were set off on behalf of the 163 participants."
All entities interested in participating in the Setoff Debt Program in 2014 must attend the mandatory training session on August 6. New employees of current participants who will be working with the Setoff Debt Program for the first time must attend a mandatory training session on August 8.