Hutchinson and Reno County officials learned last week that the state was cutting their sales tax distributions for June and July due to apparent overpayments made to local government entities more than five years ago.
The state did not notify officials of the decision, but after the county’s allocation for its Compensating Use Tax – which is the tax collected by retailers on Internet and catalog sales – showed up as 0 in the June allocation report, County Administrator Gary Meagher called the Kansas Department of Revenue to find out what was going on.
“I talked to several people before I finally got to the people I needed to,” Meagher said. “They said an audit was done, which indicated there were three quarters in 2012 and 2013… in which the wrong amount of sales tax was distributed.”
“So my next question was, is that going to carry over into the July distribution,” Meagher said. “The answer was, ‘yes, some.’”
State officials wouldn’t detail the amount withheld for June, but said the total would be $61,386.77 withheld, Meagher said.
“This would have impacted all the entities that receive sales tax distributions in Reno County, not just us,” Meagher said. “The city of Hutchinson received a reduction and so did all the small cities that receive a distribution.”
Officials did not explain to him how it made an over distribution, Meagher said, or why it took five years to discover it.
(Read more: Local – The Hutchinson News)