Casper officials will not be filing a lawsuit over the tax error that will cost the city $1.7 million in sales revenue, according to Mayor Ray Pacheco.
“We are not going to seek damages,” he said Friday.
The city mistakenly received an additional $1.7 million in sales tax distributions after a Sweetwater County vendor incorrectly reported its taxes in Natrona County. The error occurred from October 2013 to December 2015 and was detected during a routine audit, Kim Lovett, the administrator of the Department of Revenue’s Excise Tax Division, said earlier this month.
After the state learned about the mistake, it deducted the money from Casper’s monthly sales tax distribution — much to local leaders’ chagrin.
“If [the vendor] did this intentionally, I think they should be sued,” City Councilman Dallas Laird said at the Council’s July 10 work session.
The councilman said it would have been advantageous to the vendor to file in Natrona County because the sales tax is 5 percent. Sweetwater County’s sales tax was 6 percent from 2013 until April 1 of this year.
But the mayor said Friday that state officials explained the mistake was unintentional and that the Council will therefore not be taking legal action.
Pacheco said this mix-up will not have a direct effect on residents.
“Everything will continue to move forward; it will not affect day-to-day city operations,” he said.
Casper officials will be taking a loan from the state that will give the city up to five years to pay back the $1.7 million, he explained.
The mayor added that Council members have urged state lawmakers to re-examine the sales tax reporting system.
“I think our state leaders understand [our concerns] and I would imagine that it’s going to be a topic of interest in the next election cycle,” he said.
Sales tax mistakes aren’t common, but they’ve happened before and will happen again if changes aren’t made, Pacheco said.
Lovett previously explained that the Department of Revenue relies on vendors to correctly report information.
“This is a self-reporting system,” she said.
The administrator said there are no penalties for mistakes of this nature. She declined to identify the vendor and said tax return information is confidential.
But Laird publicly identified the company as Solvay Chemicals earlier this month while publicly discussing how the error will impact the city.
The councilman later told the Star-Tribune that he received the vendor’s name from an anonymous source and wants state officials to confirm or deny its accuracy.
Solvay is an international chemical company with about 50 manufacturing, administrative and research facilities in North America, according to its website. Solvay Chemicals, Inc., in Green River is a major U.S. producer of soda ash from trona, a naturally-occurring mineral used in glass manufacturing.
Multiple attempts to reach the local site manager, Todd Brichacek, were unsuccessful. No company official returned a request for comment.
Casper wasn’t the only entity in Natrona County affected by the error. The Natrona County government collected an additional $366,000. Mills ($108,000), Midwest ($13,000), Bar Nunn ($69,000), Evansville ($80,000) and Edgerton ($6,000) also received more than they were due.