State explains local sales tax discrepancies

The Washington state Department of Revenue is under close scrutiny by officials in Island County these days.

Island County and Island Transit’s June sales tax returns appeared nearly $100,000 below projections, and Oak Harbor’s June return was approximately $90,000 short.

State officials say the trouble started when a Snohomish County business made a typo on its April tax return. The mistake caused too much money to go to Island County in May. To correct the error, the Department of Revenue cut the June payment, which resulted in an uncharacteristically low June total, said Mike Gowrylow, a spokesman for the Washington state Department of Revenue.

“There was a mix-up in the distributions,” he said.

“Too much money was sent your way. Once the taxpayer realized the mistake, they made a correction and we had to take that money away,” he said. “We have to adjust when that happens.”

Gowrylow would not name the business that filed the faulty return for privacy reasons, but said they represented a major construction project in Snohomish County.

Gowrylow said the Department of Revenue did not notify the county of the adjusted June sales tax receipt, but a department official returned Island County Chief Deputy Treasure Anna Marie Nunez’s inquiry by Friday morning, within one day of her initial call.

Elaine Marlow, Island County’s budget director, also contacted the Department of Revenue Wednesday by phone and email. As of Monday she had not received any answers.

“This happens all the time,” Gowrylow said. “Normally we would make a courtesy call, but given the economy and our workload, we didn’t think it was that big of a number to warrant a call. This didn’t stand out for us,” he said. “In retrospect, we probably should have called them.”

Audit faulted

in Oak Harbor

Meanwhile, the county-bound tax receipt typo did not affect Oak Harbor’s June share. According to Gowrylow, the city’s anemic June sales tax receipts is a whole different issue, attributing the low June payment to a business audit gone awry.

City Finance Director Merriman contacted the Department of Revenue last Wednesday after he noticed the problem.

But Merriman’s call to the Department of Revenue on Wednesday went unanswered until Monday.

The Department of Revenue did not provide any answers with their call, according to Merriman. It was more of an acknowledgement of the problem, he said.

Gowrylow told the Whidbey News-Times that the state’s low June payment resulted from a business audit mix-up.

“In this case the business overpaid and it was a question of whether the return was mis-coded,” he said, adding the department will continue to investigate the issue until the numbers add up.

“I think the only place there may have been a breakdown was in our communication with Oak Harbor,” he said.

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