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Sales tax mistakes costly for counties
General Assembly has choices to help solve misappropriation of sales tax
Date published: 9/6/2009
BY DAN TELVOCK The Virginia Department of Taxation says the state legislature can penalize businesses that do not accurately report which locality gets a portion of the sales tax they collect, according to a new report. Sending sales tax revenue to the wrong localities has been a problem in Virginia since the tax was initiated in 1966, says the report to the General Assembly. The report was released Tuesday. The problem occurs in counties such as Spotsylvania and Fairfax, both of which have mailing addresses that incorporate the name of a neighboring city. Most of the confusion for businesses results from Virginia's unique local government structure that allows independent cities and counties. They are distinct political entities without any overlapping taxing authority. The confusion is increased by mailing addresses that cross political boundaries. For example, some Spotsylvania residents and businesses use a Fredericksburg mailing address. After Henrico County finance staff estimated $5 million in sales tax revenue was lost to the city of Richmond annually, the county went through an expensive and time-consuming campaign to change the address name of 16 ZIP codes from Richmond to Henrico County. The changes took effect this year. The Spotsylvania County Board of Supervisors considered changing the Fredericksburg addresses, but local residents were not in favor of it and the plans were scrapped. Deborah Williams, Spotsylvania County commissioner of revenue, reported last year that Fredericksburg received $400,000 of the county's sales tax money because businesses incorrectly reported a locality code for the city. She said she hadn't read the Department of Taxation report and couldn't comment on it yet. The department handles about 50 of these errors each month, out of about 92,500 monthly payments. The revenue goes into a special account and is distributed to localities based on their pro rata share of the local sales and use tax that is assigned to localities. One percent of the 5 percent state sales tax goes to the locality in which the tax is collected. The report states that businesses could get a discount on the sales tax remittance if they use state-certified software to fill out the tax returns. The report also mentions a discount to retailers that properly register with the Department of Taxation.
Read more stories about Spotsylvania Date published: 9/6/2009
If Spotsylvania didn't...
(posted by
JMassey699
, Sep. 6, 2009 8:46 pm)
coddle to the newcomers and didn't give in to them all the time, then we wouldn't have this issues.
And many of these residents are too dumb to know where their residence is. I've heard some newcomers wonder why James Monroe isn't a county school and why their children don't go there even though it's closer to their dwelling.
Spotsylvania should just make everything "Spotsylvania" on the mailing addresses for branding purposes and to ensure this doesn't happen again and not give in to the elitists.
The perfect solution...
(posted by
TPKeller
, Sep. 6, 2009 6:27 pm)
What do you want to bet that if the city or county that was OWED the tax, billed and COLLECTED their proper tax, AND the city or county that erroneously received the payment KEPT IT, with no refund given, that NEXT YEAR the business owner would probably figure out the proper place to send ONE payment... Think of it as the "'I'm too dumb to know where my business is' tax..."
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