Impact of unpaid taxes on community unclear
Published 6:00 am Friday, February 13, 2009
Officials say $5.6 million in unpaid taxes are a result ofbusiness audits by the Brookhaven District of the Mississippi StateTax Commission, but the specific impact of those numbers onBrookhaven and Lincoln County’s sales tax income is not immediatelyavailable.
State Tax Commission Director of Communications Kathy Waterburysaid in the last 18 months over $5.6 million in unpaid taxes can beattributed to businesses in the Brookhaven District. However, it isno simple task to figure how much of that would go into the city’smonthly sales tax checks if it were paid.
“Those are additional unreported taxes of $5.6 million, whichwould benefit obviously the municipality as well as the state,” shesaid. “If it’s sales tax of course, within municipal limits, then18.5 percent of sales tax we collect goes to the city.”
The tax figures came to light after a local businessman wasindicted on charges of 32 counts of tax evasion totaling near halfa million dollars. Some officials questioned whether that audit wasresponsible for problems with the city’s sales tax checks that camein September and October.
According to Brookhaven’s September report, the city received acheck from the state Tax Commission for 574,985.44, an increase ofabout $170,000 over September 2007’s $404,870.83. The significantincrease raised questions until Waterbury said at the time that itwas from a 37-month, more than half-million dollar audit, whichprocessed that month, and had not been paid.
A $103,444.97 adjustment amount was taken from the city’s salestax check the next month, dropping sales tax totals to $328,397.23for October. The amount would have been $431,842.20, had theadjustment not been needed to be made to make up for the one localbusiness that had an audit that had not been paid, tax commissionofficials said.
Waterbury said the investigations division primarily auditsbusinesses, some of which are owned by corporations and some byindividuals.
“Particularly because it brings money into the state, our chieftax is sales tax,” she said. “We audit businesses for sales tax allover the state. Of course when we audit for sales tax, we also lookat income tax and a combination of several other things.”
Waterbury said things like tourism taxes are also taken intoaccount. She said local sales tax return numbers are very muchimpacted by the taxes paid by local businesses.
“A lot of the special levies are additional taxes on things likerestaurants and hotels, motels and tourism, and of course all ofthat will benefit back to the city and county or otherbeneficiary,” she said.
Individual tax return investigations are done in a separatedepartment and go into state figures. They can’t be figured byarea, Waterbury said.
“We don’t calculate those by areas, we’re looking at that from astatewide perspective. We know what district production is becauseit’s a separate office,” she said.
Other things such as severance tax in areas that are high in oiland gas production are also beneficial to cities and countiesaffected by those industries, Waterbury said. Lincoln County issomewhat affected by those kinds of taxes, though not as much assome of the counties farther south.
Waterbury said there are many things to consider when looking ataudits in the area.
“This is something we do regularly. We’re always out thereauditing, and there are a lot of other fish in that ocean,” shesaid, referring to Brookhaven and Lincoln County.