Tax burden has county a bit miffed
Lawrence County will pay back money to the state
that, until April, local officials said they didn't even know they owed.
Lawrence County Chief Deputy Auditor Chris Kline said the county's already tight budget took another hit this spring when Ohio Department of Taxation officials informed county officials that the county owed the state $330,000, and the state would like that in six payments, thank you.
Large corporations self-impose their sales tax, and make payments based on estimates of usage. Kline said Dow Chemical officials notified the state two years ago that they thought they may have been overestimating their taxes, and therefore paying too much money. The state conducted an audit of Dow Chemical's tax payments during the last four years and concluded the company had indeed paid $300,000 too much in taxes over the last four years.
State officials refunded Dow Chemical for the $330,000, but then in April, notified local officials of the overpayment and announced that $55,500 would be withheld from the county's portion of sales tax for six months to collect the overpayment from Lawrence County coffers.
"That's like one-fourth of a monthly payroll," Kline said. "That's a considerable chunk of money. The same situation happened in Monroe County, and the state let them pay theirs back in, I think it was 30 months. They said Monroe County was a smaller county. I'm pretty upset. We were given no notification. If we were told two years ago that there was a possibility this could happen, we could have braced ourselves. But we got no options, no discussion, no anything."
Jeanette Knuchel, financial officer for the Monroe County Auditor's Office, said the state officials informed her office in February that a Monroe County entity had overestimated its use tax and had overpaid. As with the situation involving Dow Chemical, Knuchel said the state had repaid the amount to the company and then informed Monroe officials that they owed the state $300,000.
"We were pretty upset because they knew ahead of time and didn't tell us," Knuchel said. "They told us a month before they that they were going to take our use tax in one lump sum. They could have at least given us some forewarning."
Knuchel said Monroe County, with its $3.6-$3.8 million annual general fund budget, could not absorb the loss of $300,000, not even during the course of a year. Knuchel said Monroe County officials lobbied state tax officials, who finally offered a other deal: the state would take all use tax from the county until the $300,000 was paid, and that would be approximately 36 months. Monroe County would pay a minimum of $12,000 each month, and if the use tax did not cover the $12,000, then other taxes would be used to make up the difference.
The loss of $330,000 from the local general fund has Lawrence County officials smarting, especially at a time when dollars are hard to come by.
"If not for that, we would have been in pretty good shape," Commission President George Patterson said. "They just wanted to grab it all at once."