Casper’s leaders are hoping the state legislature will revise Wyoming’s sales tax collection and distribution system — and Gov. Matt Mead said Wednesday that he agrees the current system should be examined.
“I do think it’s worth looking at,” he said in an interview Wednesday in the Star-Tribune newsroom.
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 later detected during a routine audit.
After the state learned about the mistake, it deducted the money from Casper’s monthly sales tax distribution in July. Casper officials then took a loan from the state that gave the city up to five years to pay back the money.
“This is not the first time it’s happened…” said Mead, adding that he received a frantic call years ago from Sheridan’s then-mayor regarding an over-payment issue. “If there was a way to modify (the system) to provide a triple-check or a double-check, that would be worthwhile.”
The Department of Revenue currently has a self-reporting system that relies on vendors to correctly report tax information. There are no fines or other penalties for businesses that file in the wrong county, Kim Lovett, the administrator of the Department of Revenue’s Excise Tax Division, said in July.
At the Casper City Council’s work session last week, some council members said there need to be consequences for vendors who file in the wrong county to encourage businesses to be vigilant with their taxes.
But the governor said he would be hesitant to punish businesses for making an innocent error.
“They are trying to do the right thing, and they have a made a mistake, so I think a system that provides clarity to them and the state may be the best way to do it,” said Mead, who in January will hand over the office to Gov.-elect Mark Gordon. “Those mistakes, they are not made out of any bad intent because they are paying their bills.”
Following the mix-up this summer, two other state lawmakers told the Star-Tribune that they also believe the sales tax system should be reviewed.
“We don’t want this to happen to any other county or municipality,” said Sen. Bill Landen, R-Casper.
The senator said he wanted to explore whether the system could be altered so that any county that experiences a significant change in sales tax figures year to year would automatically undergo an audit.
Rep. Tom Walters, R-Casper, said taxpayers who overpay the state only have a limited amount of time to notice the error and request a refund. The representative said lawmakers should consider holding the state to similar standards.
While speaking to the Casper City Council in September, Department of Revenue Director Dan Noble said some mistakes are likely unavoidable.
“I’ve got 32,000 vendors that I have to deal with on a monthly basis,” he said.
Noble said any changes regarding how the department operates would need to come from state lawmakers. Department of Revenue officials are not permitted to lobby for a position, he said.
City Manager Carter Napier previously said he was shocked to learn about the massive mix-up.
“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 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.