The city of Casper will receive $1.7 million less in sales tax revenue from the state this month, despite the protests of officials and local leaders.
“We were initially told that we would be able to work this out over a period of months, but it didn’t happen that way,” City Manager Carter Napier said at the City Council’s July 10 work session.
A Sweetwater County vendor erroneously reported its taxes in Natrona County, leading Casper to incorrectly receive an additional $1.7 million in sales tax distributions from the state, officials at the Wyoming Department of Revenue said last week.
The Council instructed Napier to push back and fight for state officials to deduct the money gradually from multiple checks.
“Why do they need to hit us all at once?” asked Councilman Mike Huber.
Napier said he was already speaking to local legislators and planned to continue discussions with state officials this week. Council members also urged the city manager to reach out to Governor Matt Mead.
But the issue isn’t negotiable, according to Kim Lovett, the administrator of the Department of Revenue’s Excise Tax Division.
“It was deducted out and the checks went out today,” she told the Star-Tribune on July 11.
Deducting the money gradually from Casper’s checks would be unfair to Sweetwater County, as well as to the vendor, Lovett said.
The error, which occurred from October 2013 to December 2015, was detected during a routine audit. Lovett said the audit also revealed that the vendor had overpaid taxes and was due a refund.
The state would have to delay payments to the vendor and to Sweetwater County if Casper’s deductions occur over a longer period, she said.
But Lovett said that Casper officials still have options that could help soften the blow.
“We can set up a payment plan where we give them the money that they lost out and they can repay it over time,” she said.
Lovett added that she understands that many of the parties involved in the mix-up are upset. But the administrator said the department relies on vendors to correctly report information.
“This is a self-reporting system,” she said.
Lovett said return information is confidential and declined to identify the vendor. She said last week that there are no penalties for mistakes of this nature.
Skeptical council members
But some City Council members doubt this was an accident.
Councilman Dallas Laird said he wants an investigation into whether it was beneficial for the vendor to list its location as Natrona County.
“If they did this intentionally, I think they should be sued,” said Laird, who also wants to know the vendor’s identity.
Councilman Chris Walsh agreed and said the incident didn’t sound like an “innocent mistake.”
Lovett firmly denied that the vendor’s error involved any intentional wrongdoing.
“That’s not what happened ... There was no benefit to them,” she said.
Napier told the Star-Tribune that the city could potentially use cash balances from the general fund to cover the unexpected shortage. But he was still hoping to find a better solution with state officials.
The city manager said last week that he was shocked by the news.
“It was very discouraging given all the work that we’ve done to keep ourselves self-sustaining ... It’s something that we didn’t anticipate and there’s nothing that we did that caused this problem,” he said.
Casper wasn’t the only entity effected by the error. The Natrona County government inaccurately received 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. When factoring in the city of Casper, that equates to a $2.37 million error.
While the mistake has left Natrona County governments scrambling, the unexpected money will be a “nice little shot in the arm” for Sweetwater County, County Treasurer Robb Slaughter said last week.
This isn’t the first time there was a mix-up with taxes in Sweetwater County, according to the treasurer.
“We had a situation years and years ago where a taxpayer actually paid property taxes in Carbon County — it was a major deal,” he recalled.
Slaughter said Sweetwater County officials ultimately decided to allow Carbon County to keep the funds.