Important Information Regarding Electronic Payments

Electronic Payments

Caution when making Municipal Tax Payments Electronically

Over the past several years, municipal tax payments by electronic checks have increased. The Town of Colchester accepts these checks for payment but cautions taxpayers who use this service.  

Most banking institutions have a disclaimer that is overlooked regarding the use of electronic payments for municipal taxes. This disclaimer is set up for a very good reason. With many banking institutions, when a taxpayer chooses to pay their tax bill electronically with a specific pay date, a clearing house receives the money on that day from the taxpayer’s account which leads the taxpayer to believe the tax collector received the check and cashed it. That’s not the case. That clearing house has the money until the tax collector receives the check and then cashes it. That’s a big problem, and not the only problem.

The other major flaw is that clearing houses do not have a postmark on any of their envelopes. If the tax collector does not receive a payment by the grace day of that collection period, the envelope is checked for a postmark and if there is not one, the payment inside is considered late regardless of what the check date is. CT State Statute 12-146 clearly states,” No tax or installment thereof shall be construed to be delinquent under the provision of this section if the envelope containing the amount due as such tax or installment, as received by the tax collector of the municipality to which such tax is payable, bears a postmark showing a date within the time allowed by statute for the payment of such tax or installment.” The law does not refer to check dates or banking records so US postmark is the only legal writing tax collectors can accept.  

In summary, using electronic checks for the payment of taxes is a risky way to pay. There is no recourse if the tax collector receives your envelope late.

Thank you. Please call the tax office with further questions. (860) 537-7210