By Charlotte Aguilar
As it copes with the growing impact of the COVID-19 pandemic, the city of Bellaire has been socked with what amounts to a $694,000 bill from the state, to return sales taxes the city was overpaid over a period of years.
In a notice to City Council in his weekly report, City Manager Paul Hofmann called the notice “bad news on top of bad news.”
“Of course we were already projecting a reduction of sales tax revenues,” he wrote. “We’ll incorporate this new information into our sales tax projections.”
A business described as a “technical services company” operating in Bellaire moved to Houston more than five years ago and neglected to file the proper paperwork on its address change with the new taxing jurisdiction, Hofmann reported. As a result, the portion of its sales taxes that are rebated to the city where a company does business continued to flow to Bellaire.
The error was found during a sales tax audit by the city of Houston.
Actually, Bellaire is receiving something of a break as the “lookback window” for repayment is limited to 48 months, while the payments cover a longer period. “We will have the opportunity to spread the repayment amount over a period of months,” said Hofmann.
“Obviously this isn’t great news, but we’ll manage it, like we always do,” Mayor Andrew Friedberg told Essentials News. “We’ll work with the comptroller in doing what’s required, while taking advantage of whatever options may be available to us.”
When contacted, Councilmember Nathan Wesely offered three questions “to start the dialogue:”
“1. When did we last do a sales tax audit?
“2. What is the process to determine the entity sales taxes are remitted to?
“3. Can we have a list of those who pay sales tax (perhaps top 50) added to the weekly report – perhaps on a monthly basis?
In requesting the identity of the business at the center of this issue, Essentials was told by the city that the state tax code provides confidentiality in such matters, citing Section 321.3022(f), which says such information “is confidential, is not open to public inspection.”
Cheryl Bright, the city’s community relations administrator, said that any City Council discussion, though, “should be able to occur in regular session without violating confidentiality,” rather than a closed, executive session.
Cities and some other taxing entities receive a monthly rebate of some of taxes paid by businesses in their jurisdictions. Last year, for instance, Bellaire received about $2.4 million in comptroller’s allocations.