The state auditor suggests the legislature reconsider giving businesses a tax break for doing something they’re supposed to do anyway. She says the policy is costing the state tens of millions of dollars.
The situation developed about 50 years ago when the legisalture voted to let businesses that send in their sales taxes on time keep two percent of the tax payment. Income taxpayers don’t get to keep two percent of their taxes for filing on time. But businsses do when it comes to sales taxes.
Auditor Susan Montee says businesses kept $93 million in fiscal 2008, a significant amount in times of cuts to state programs and services. But she says the Revenue Department has never told the legislature how much money is involved in the two percent policy. She says the legislature cannot make a policy decision on the matter because it hasn’t been given information about it by the department. In fact, she says, the legislature expanded the policy last year with a new law letting car dealers collect sales taxes at the dealerships instead of making buyers go to a state license office to pay it. She says the new law lets dealers keep millions of dollars.
The Revenue Department says it lacks software and people to do the kind of tracking Montee says would help the legislature make policy decisions on this issue as well as on whether to give more exemptions to sales tax payments.
Hear Bob Priddy’s story :59 mp3 1timelyva
Listen to Montee’s news conference 29:17 mp3 1auddor