Tax mistake adds to Oak Harbor’s coffers

Oak Harbor’s official number cruncher, Doug Merriman, noticed something wasn’t right with the city’s sales tax receipts earlier this year. His keen eye caught a chain of miscues set off by an Ohio company’s mistaken sales tax payment to Island County.

“I noticed that the amount we received for the month didn’t add up,” the finance director reported to the city’s finance standing committee Tuesday. “It was a significant drop.”

The problem began when an Ohio business erroneously collected and paid sales tax to Island County for a three-year project it completed on a portion of Ault Field Road by the Whidbey Island Naval Air Station.

The Department of Revenue attempted to remedy the mistake by re-paying the out-of state company, but when it refunded the payment, the money was withdrawn from Oak Harbor’s account instead of the Island County account, where it was originally deposited.

Merriman said the issue will be resolved when the city receives a payment in the amount of $171,774 from the Department of Revenue, which is expected to arrive by August 21.

“They’ve been keeping us updated on the status via email and phone calls,” he said.

The sizable repayment from the Department of Revenue is one of two milestones for the city’s sales tax revenue stream, Merriman said.

Since March, the city’s sales tax receipts have shown a four-month-long upward trend.

“We’ve probably leveled out now and we’re showing signs of some recovery,” he said of the receipts that are tacking 1 percent above last year’s numbers.

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