Sales Tax Audit Shows Funds Owed By Some Businesses

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By Linda Kor
    The audit concerning sales tax revenues is continuing in the City of Holbrook, with the latest report provided by auditors Albert Holler & Associates showing a substantial amount of back sales tax owed after an audit of just seven businesses.
    The most recent update was received from the auditors July 31. The initial audits were of local contractors, with auditors reviewing building permits and valuations, then comparing them to a sales tax reporting history. The contractors who appeared to not be reporting or paying correctly were the ones selected for audit. As of July, seven audits were complete from the 10 selected for review.
    The taxes identified as unpaid from the seven audits came to a total of $88,799. Of that amount, $3,138 has been paid, $74,088 was pending completion of a 45-day petitioning period and $11,307 had been accrued in penalties, with an additional $264.90 due to adjustments made after more documentation was received.
    When asked the results of the $74,088 now that the 45-day petitioning period has past, City Finance Director Randy Sullivan stated that he had yet to receive an updated report from the auditors regarding that amount.   
    The audit program began in November 2008 after a discussion by the Holbrook City Council of possibly raising the city’s sales tax. It was noted that prior to approving a sales tax increase, an audit should be conducted to ascertain that all individuals who should be collecting and remitting sales tax were doing so.
     The objective of the audit is to provide both educational and enforcement goals. Some people may not be aware they should be charging city sales tax and the audit will bring it to their attention that they are subject to the taxes.
    Some businesses that are subject to the tax, but may not be completely aware of the provisions include contractors, some business owners, renters or those involved in the sale of property.
    In other cases, some businesses may have been collecting the tax, but not remitting it. It is expected that a majority of the businesses in the city have complied with the law and have nothing to worry about.
     The city plans to provide a lenient payment policy that will allow people to get caught up with their payments over a period of time.