Oops: 3.20% fee to pay Somerville excise tax online? Yikes!

[serious-noir.livejournal.com]

Correction: the fee is 3.20% of the car's value excise tax with a $3. minimum.

Guess I've never paid my Somerville excise tax on-line.
Went through the steps to do that just now and discovered right near the end (through an alert - thank you!) that the fee is $3 3.20% of the car's value excise tax, with a $3 minimum. That seems kind of high – has it been that for a while? The city does it through an enity name Kelly & Ryan Associates

I pay all my monthlies on-line and only RCN charges a fee – that's a $1 and I'm lazy but $3 seemed a bit much, so it was back to my "forever" stamps. .  .

Comments

$3 is for credit card payments

[wardv.livejournal.com]

The fee for direct debit from a bank account is $0.50. Just one cent more than a forever stamp, but way, way more convenient.

Oh, and for RCN - you can get rid of the payment fee if you set your account to autopay. Autopay with a credit card is still free - no fee.

[ron_newman]

Could you pay both of these through your online banking bill-pay system, and not have a fee at all?

RE: $3 is for credit card payments

[spettacolo.livejournal.com]

I just had the same reaction to the $3 fee and wrote to the treasurer. This was their response:

"Thanks for your feedback. There is a convenience fee when using a credit
card, which is charged by and collected by the credit card company -
Somerville does not receive any of it. We do recognize the value of
online payments, and we actually removed the fee for an electronic bank
transfer - it was .40 cents, but is now free for real estate and water
payments. There are other benefits to online payments such as scheduling
payments in advance and email notification.

Regards,
Pete Forcellese"

I went ahead and mailed my bills in with a check and a stamp.

It's 2015. Bills paid online should be REDUCED, not charged a fee.

[kelkyag]

It does cost the city (or anyone) money to accept credit cards. Most merchants (raise prices a bit and) trade off higher costs for more purchases with the convenience of credit cards. Convenience of purchase isn't so much an issue for the city.

[surrealestate.livejournal.com]

Yep. This thread makes me wonder how many people don't actually realize that it costs merchants money to accept credit cards.

[serious-noir.livejournal.com]

True – though one wonders: (as someone pointed out, since RCN waives the fee for automatic CC payment) what savings they see from CC autopay compared to one-time CC payments.

[cravereality.livejournal.com]

They get the money faster and it's more a sure thing. People who don't have autopay are probably more likely to be late or completely flake out.

[clevernonsense.livejournal.com]

In which case they get a late fee, and eventually they will have the renew their registration which they can't do until they are paid up.

[spettacolo.livejournal.com]

I was not trying to pay with a credit card. The $3 was being added to my e-check/local bank transfer.

[kelkyag]

It sounds like the percentage vs. flat $.50 has been sorted out. I'll guess that surcharge goes straight to the entity you mentioned above that's handling electronic payment for the city, but don't know.

RE: $3 is for credit card payments

[gruene.livejournal.com]

"It's 2015. Bills paid online should be REDUCED, not charged a fee."

Bullshit. Credit cards cost a huge amount of money to process. I'd rather the 3% or so go to city services and not to Visa/MC and the issuing banks.

RE: $3 is for credit card payments

[spettacolo.livejournal.com]

And why do credit cards cost a "huge amount" to process? That's my point. Someone is making lots of money moving around ones and zeros. That's what's bullshit.

The 3% does not go to the city. It goes to the banks.

When I went to pay my $62 excise tax bill, a $3 'convenience fee' was added to the shopping cart before I even got to the page where I chose my type of payment. I tried to do an e-check through my bank and the $3 fee remained. I had no intention of paying with a credit card. Maybe there was just some glitch for me, but that was my experience. That's where I'm coming from.

When I said "Bills paid online should be reduced" I was referring to an e-check/bill pay transfer. There is no way it costs more to accept my money electronically from my local bank compared to having someone manually open and process envelopes and paper checks. I would think Somerville would prefer every single tax and fee be electronically swept into their accounts, rather than paying staff to handle paper.

RE: $3 is for credit card payments

[gruene.livejournal.com]

Merchants that accept credit cards must pay interchange fees to the issuing banks. It's one of the most expensive ways to take payments out there. I'm glad the city charges people who use credit cards because I don't want my taxes paying interchange fees. Is that clearer? I agree that the fee should be reduced for electronic check.

[scf21.livejournal.com]

I just went on to try to pay the bill (prepared for a 50 cent bank account fee) but before I even entered payment info there was a $4.40 "online convenience fee". That is ON TOP OF the 50 cent of $3 payment fee. Crazy. I will waste an envelope and mail it in (envelope is equally wasted sitting in my drawer).

[serious-noir.livejournal.com]

Just took another look – I got it wrong: it is not a $3 fee – it is $3 minimum on a 3.20% rate for credit card payment.



Fwiw - I wasn't saying there shouldn't be a charge for the "convenience" – I was just surprised at the amount – and now even more surprised that it is percent-based. I have an old car with $41 excise tax – with a newer car @ $25. per $1000 – that fee can add up.

[scf21.livejournal.com]

Ahhh, I see now. Once I checked the e-check option it changed to $0.50. My credit card rewards are not enough to cover their huge credit card fee!

[ron_newman]

3.2% of the value of the car? Or 3.2% of the tax? Those are very different things.

[serious-noir.livejournal.com]

I assume of the tax.

Is this right = (so a car valued at $10,000 would have an excise tax due of $250 (@ $25/1000) @ 3.2% = $8.)?

A. is high
B. Why should a "convenience fee" be percentage-based?

Anyway. . . I'm sticking with stamps and buying more "convenience fee" ice cream.

[ron_newman]

I asked because your edited post says, in two different places, "3.20% of the car's value"

(And I'd still pay with my bank's online payment system, which doesn't cost me anything.)

[serious-noir.livejournal.com]

Doh! I'll fix that.

[surrealestate.livejournal.com]

It's percentage-based because that's how credit card fees work, so the company doing the processing has to charge that way or they lose money on the deal. As to why credit cards still work that way... I think it's just because they can.

[mattdm.livejournal.com]

And why can they? Because, this thread, basically. No one is complaining about the credit card companies, they're suggesting the vendor (in this case, the city) should suck it up.

[surrealestate.livejournal.com]

I think it's been very unclear what people were complaining about, actually. My initial impression was that people were complaining about the City, but then at least one follow-up suggested one person was complaining about the system as a whole. If the question of why the fee is percentage-based referred to the actual banks as opposed to the processors, I didn't read it that way.

[intuition-ist.livejournal.com]

If you pay through your bank's online bill pay, you can avoid random fees charged by the companies you're paying.

But more to the point WRT this post -- be extra extra careful if you're doing that with ANY Somerville government office. The offices don't (won't!) talk to each other, and many addresses are quite similar, and the money goes in but it never ever comes out. And if you get it wrong, you get nastygrams from the office you were supposed to pay (which is why I know they won't talk to each other). Frickin' local government. We'd be less likely to bear the scars of interacting with it if we stuck our appendages into a lion's mouth each time we needed anything from them...