A Sweetwater County vendor that erroneously reported its taxes in Natrona County received no benefit from doing so, Wyoming Department of Revenue Director Dan Noble says.
The vendor paid the correct amount of taxes, albeit in the wrong county, Noble said, giving the state official no reason to suspect fraudulent conduct.
“I certainly understand the frustration you folks feel,” he said last Tuesday at the Casper City Council’s work session.
The city mistakenly received an additional $1.7 million in sales tax distributions because of the error, which occurred from October 2013 to December 2015. After an audit detected the mix-up, the state deducted the money from Casper’s monthly sales tax distribution in July — much to local leaders’ chagrin.
To soften the fiscal blow, city officials have since received a loan from the state that gives the city up to five years to pay back the money. But some council members still wanted state officials to explain how they knew the error was unintentional.
Councilman Dallas Laird has repeatedly stated that filing in Natrona County may have been advantageous to the vendor because of the difference in sales tax.
Natrona County’s sales tax is 5 percent. Sweetwater County’s sales tax was 6 percent from 2013 until April 1 of this year, Sweetwater County’s treasurer Robb Slaughter previously told the Star-Tribune.
“If there was fraudulent conduct, then I want to consider a lawsuit,” Laird said last month.
But Noble told council members that the vendor paid the Sweetwater County tax rate, despite filing in the wrong jurisdiction. The director added that errors of this nature are common — this particular mistake was just more damaging because of its magnitude.
Vice Mayor Charlie Powell said he still found it concerning that the vendor was not penalized. Establishing fines for these types of errors would encourage vendors to be more attentive, he said.
“In this system all you have to do is say ‘Oh gosh, I’m sorry…’” said Powell. “We are in this situation because someone was careless.”
Laird said he was alarmed to hear the department routinely sees mistakes of this nature.
“What can we do to protect ourselves?” he asked.
Noble explained that 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.
Some mistakes are likely unavoidable, added the director.
“I’ve got 32,000 vendors that I have to deal with on a monthly basis,” he said.
Laird publicly stated in July that an anonymous source identified the vendor as Solvay, an international chemical company. The councilman said at the time that he wanted state officials to confirm or deny this information.
Noble said Tuesday he could not identify the vendor, explaining that he is legally prohibited from publicly releasing tax return information.
But the Council recently received a letter from officials at Solvay confirming it was the unidentified vendor. Laird provided a copy of the letter to the Star-Tribune.
In the letter, local site manager Todd Brichacek states that the mistake was a clerical error.
“We regret that this error, which in no way benefited Solvay, has had a state funding impact on the town,” Brichacek wrote. “We are working with our tax advisers to prevent this type of clerical error from happening in the future.”
Solvay owns 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.
Officials at the Green River site have not returned multiple requests for comment from the Star-Tribune. The company’s international media relations manager, Amandine Grison, did not respond to an email requesting an interview.
Laird said Wednesday he no longer thinks the city needs to consider a lawsuit against the vendor, but he still wants state leaders to find a more efficient way to manage sales taxes.
If mistakes are common, then the state needs to make some changes, said the councilman.
State leaders weigh-in
The City Council has urged state lawmakers to re-examine the sales tax reporting system, Mayor Ray Pacheco said last month.
Sen. Bill Landen, R-Casper, told the Star-Tribune in August that he is discussing the matter with officials at the Department of Revenue and the Department of Audit to see if they need additional resources and tools.
“It’s very possible that I would bring a piece of legislation (forward) if we decide there is a fix to what took place,” he said.
The senator said he is exploring whether the sales tax 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, agreed that lawmakers need to review the current system.
If taxpayers overpay the state, they only have a limited amount of time to notice the error and request a refund, said Walters. The representative said lawmakers should consider holding the state to similar standards.
Rick Kaysen, the executive director of the Wyoming Association of Municipalities, told the Star-Tribune that he hopes lawmakers will make improvements.
“Towns and municipalities are expected to be accurate with their financial reporting and their audits and I think the same standard should be held for taxpayers,” 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.
While the error left Natrona County governments scrambling, the unexpected money was a pleasant surprise for Sweetwater County, according to the county treasurer.
“It will be a nice little shot in the arm,” Slaughter said in July.
The treasurer added that this wasn’t the first significant mix-up with taxes in Sweetwater County.
“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 let Carbon County keep the funds.