[November 22, 2008]

City gets help in hunt for sales taxes

(The Edmond Sun, Okla. Via Acquire Media NewsEdge) Nov. 22--EDMOND -- Edmond's Finance and Audit Committee voted this week to continue contract service with Revenue Recovery Group on local sales tax audits in conjunction with the Oklahoma Tax Commission.

RRG of Louisiana recovers lost revenues for cities and towns. RRG acts as an extension of the Tax Commission's sales tax audit program. These sales tax audits allow cities to collect back sales taxes from local companies and ensure the sales taxes have been paid to the proper cities, said Ross VanderHamm, Edmond's finance director.

At issue was $23,000 for sales tax audits owed to RRG by the City of Edmond for work RRG did prior to 2007. The audits had been authorized by the city. But RRG could not bill the city until the Tax Commission accepted the audits. This item will go to the City Council for approval on an upcoming agenda.

Sales tax is collected from businesses by the Tax Commission, which in turn distributes the revenue to respective cities and towns.

In October, VanderHamm presented the committee with three invoices received by RRG after the Tax Commission had reviewed the reports. These businesses include Central Glass and Mirror, the Adams Corp. (Oklahoma Building Supply) and Lowe's.

OTC took responsibility of the Lowe's sales tax audit because Lowe's has multiple stores throughout Oklahoma, VanderHamm said. Sales tax audits for Lowe's and Central Mirror and Glass have not been completed, he added.

Meanwhile, VanderHamm received an invoice for the auditing work done by RRG for $23,729 but had no documentation the city had received the sales tax due from the three businesses. This is because there had been a delay from the Tax Commission to act on the RRG sales tax audits, VanderHamm explained.

VanderHamm was left with a bill he could not verify with state tax reports. His only option is to accept the reports as rendered.

With the help of Dave Francis of the Oklahoma Tax Commission, VanderHamm was able to track public records of the payments of these sales taxes through October without interfering with vendors rights for privacy. VanderHamm investigated month-by-month audits extending back to 2003 for the Oklahoma Building Supply and Central Glass and Mirror.

"When I did that, I found of the original assessments of $78,000 that RRG said they (Oklahoma Building Supply) owed us," VanderHamm said. "Part of that, $18,000, was simply a reapportionment, meaning they paid Oklahoma City and they should have paid us."

He learned the City of Edmond had received the bulk of the sales tax revenue due from Oklahoma Building Supply. VanderHamm found that in one month, Oklahoma Building Supply had made 15 separate payments for $1,389.

In October, he learned there was $10,000 remaining to be paid by Oklahoma Building Supply. VanderHamm said the Tax Commission has been contacted by the Oklahoma Building Supply regarding the Clean Slate Program, which eliminates part of their penalty of interest to the state. VanderHamm said Oklahoma Building Supply is expected to pay off the remaining $10,000 owed in order to eliminate their penalty of interest.

Councilman Charles Lamb asked VanderHamm to define a situation in which he would employ RRG. VanderHamm said RRG would be useful in identifying a new business coming to Edmond that does not appear in his reports. RRG provides monthly reports showing any new vendors. He will be able to cross reference new businesses in town that have not filed for sales tax identification numbers with lists provided by the Tax Commission.

"I can ask RRG to look at that," VanderHamm said.

The city contracts with RRG because the Tax Commission is understaffed, VanderHamm said.

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Copyright (c) 2008, The Edmond Sun, Okla.
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