Ooops | Did City Pay State Sales Tax Erroneously on Golf Surcharge Funds?
At a recent council meeting the sales tax collection on the golf surcharge was mentioned. The attorney I recall said it is not taxed in relation to setting new rates and fees when the course reopens.
When I was looking into the surcharge and where the money was spent or set aside I was told that part of it went to sales tax. I questioned that it should not have been taxable but no one ever looked into that.
Being that I was told we paid sales tax to the state, if it was not a taxable sale. Could the city recover any of the thousands of dollars wrongly paid in? At the least this needs to be firmly ironed out before new rates and fees are set.
I held a sales tax license for an online endeavor I was trying and attended the training for it at that time, which is why I am questioning this. When I held my license a government surcharge would not have been taxable, I would have also been skeptical of charging two dollars and “back figuring” the tax. There are specific laws for setting the price and tax and how it is calculated, and even permissible.
12 thoughts on “Ooops | Did City Pay State Sales Tax Erroneously on Golf Surcharge Funds?”
Newt; Are these the same funds that the City has no valid Reconciliation for the accounts?
Wherein no one on staff could ensure that the money that left the accounts matched records were the money was actual spent?
Their is little accounting of the surcharge monies at all. Their was in fact no policy that could be found to govern what happened to it. Being that their is no solid information I only hope we have enough to show wed paid it to the state and that it was in error to have paid it. It would be worth a few thousand dollars if it is recoverable (it may not be at all either way).
Going forward either R&R needs to be built into rates or any surcharge administered with specific rules and tax applied properly.
Explain to me what these surcharges are.
Does the Golf Course charge a golf player a fee to play plus some kind of surcharge?
Newton, thank you for this information. If all this is true, what reckless mismanagement of city finances has been revealed. There is no doubt in my mind that we need new leadership on the city council to aid Bob Ford. I support Ted Noftall and hope Newton will run again when the opporunity presents itself. And of course, I would like to see Mike Gardiner and Mark Schaefer run some time in the future for city council. I would also like to see Margie Patchette get on the city council. Stiltner, Bastian, Burnette and the Mayor can leave as far as I am concerned. Lance Green might be an ok guy, but I would not like to have be suspicious that he will have baggage with him on the city council in so far as construction and developer buddies.
The surcharge was implemented by council many years ago. It was to be for R&R capital projects, however as far as could be found by research by city staff no policy was ever written to govern the flow of the money. Their apparently is not complete accounting of it available. The finance director told me that a portion was for sales tax. Which I questioned at the time but did not peruse because the subject at hand was the course work and clubhouse. I was reminded of this when in a meeting the city attorney said that their was a sales tax difference in greens fees and surcharges, as I heard it to indicate, that the surcharge should not be sales taxed. The city may be able to recover some money if it was paid in error, and obviously needs to make sure we are correct going forward.
In addition the $2 charge was apparently, from my communication with the finance director, not added to the total then taxed, as the sales tax was deducted from the proceeds of the surcharge. Their are specific rules governing the calculation of tax on that style of transaction and where it is allowed to be used.
Did the city collect sales tax on the surcharge?
From what I understood from the finance director the sales tax was taken out of the flat $2 surcharge. The process and formula mandated by the state if it was applicable involves a reduction of the actual price so that the price and sales tax total $2. If that were the case it does open another issue that staff and the course administration did not collect $2 per every round as was in the ordinance.
This is really useless chatter, unless a determination is made that it was not taxable in the first place. Then if finance can document it and state law provides for refunds of overpayment that far back. If not it just has to be right going forward. Of course everyone who paid the surcharge should know that the money was largely unaccounted for or misspent and was not here to pay for the current work.
No If’s And’s or But’s — a $2 city surcharge was collected from each Golfer using the city golf course over the past several years and nobody on city staff knows for sure were that money went. The best we can do is guess. This is not a joke!
If this is the case, and a rank and file or mid level employee was responsible for this, the powers that be would immediately demand that we identify the responsible parties and they would be fired immediately. In this case it is the city manager CEO and CFO that are responsible. Two people and their senior staff that the mayor and his cohorts were responsible for vetting and continuously lauding their value, integrity, and service at council meetings.
What this means is that the mayor, and the city council will never get down to the bottom of this because they already know who is responsible which are the same CEO and CFOs that they vetted and have taken the position that they are doing a wonderful job. In essence it means that not only the CEO and CFOs are responsible for this malfeasance but the same city officials that vetted them and continue to not only endorse them but subject the citizens of Port Orange and their subordinate employees to their incompetence. If there is anyone with any integrity on the council left they should call for an immediate investigation to find out the remaining administrators that bear responsibility in this matter and once identified immediately terminate their employment.
Neither the council or mayor have integrity. They are out for what they can get. They have been this way for so many years, Mayor wants to leave as much money as he can for his kids since he won’t be around much longer. The council are f—— wimps that can’t or won’t think for themselves. We have so much money in the city to spend and they won’t be happy until we are totally broke and then they can blame others for it. They went after a few for what their boss gave as admin. time, but what about the $$$$$$$$$$$ they spent on all the failed projects ( meters, etc), lying about projects that weren’t up to standards(main pipe that was broke) and all the consultants that we paid big money to tell us stuff that was already known. It s so sad that our council lost the real vision of our great (laugh) city that they won’t even stand up for what is right for the citizens. We have a bunch of guys that don’t care, it is not their money only the city’s that they represent. It won’t hurt their pension because they left when the city still had their money. But what about their grandkids- it won’t matter because you left them well off. You all- “the council” are following Green and he will be out soon( not soon enough) but what will you do what he wants until then. Council remember when you worked for the city (some of you), have your values changed that much? Why are you shoving it to the tax payers? Drew, I remember you from when you were training for the Fire Dept. you were so young. Can’t believe you changed! We are going thru so much as a nation and we can’t even count our own home boys to take care of their home town. Council really think what you are doing! You are pending sooooo much money on trivial things and not what is really important and missing the really important things.
This is the response I finally got back. It was forwarded to me by Robin Fenwick. If there is any doubt Ms. Fenwick can send you a public record copy of the whole chain of emails regarding my request.
From: Riehm, Tracey
Sent: Wednesday, January 28, 2015 11:03 AM
To: Fenwick, Robin
Subject: Re:Golf surcharge request
Please ask Mr. White to excuse the delay while I investigated this.
1) Mr. White asks for the policy that implements and instructs what happens to the collected money.
· I am unable to locate a formal policy. In practice, Kemper sends a monthly payment of 50% of the net collected surcharge to the City.
This payment is deposited into a separate fund (451) and then spent on capital, renewal & replacement items requested by Kemper.
So far in FY 15 the purchases (completed and pending) out of this account include 4 radios, a computer system
(used for irrigation) and new water fountains.
2) Mr. White asks how the charge is calculated and applied, if anyone is exempt and if so who and why.
· The surcharge is $1.00 for 9 holes and $2.00 for 18 holes. After the sales tax is paid, the net surcharge is 93.5 cents for 9 holes
and $1.88 for 18 holes. The City receives 50% of the money collected.
I am told the surcharge is not applied to bartered rounds, such as those associated with the “Golf Now” relationship.
3) Mr. White asks if the charge has been renewed, if it is the first time it was collected and if it was in place before 2012.
· The surcharge appears to have been in place since FY 2002
4) Mr. White comments that 50% is to come to the city, and asks where does it go.
· Please see response to item #1 & 2 above.
5) Mr. White asks about the policy governing the expenses and if the money should have been spent on normal replacement items or major rehab.
· I am unable to locate a formal policy.
6) Mr. White asks for how much has been collected and what it has been spent on, as far back as reasonable.
· There is no such existing record, however I have attached a report from our computer system of the 451 fund from 2001 through today.
City of Port Orange
Interim Finance Director
Newton, thank you for sharing this revealing information to the public. If it were not for you, we would not have known about all this. The fact that citizens can spot these costly “mistakes” means that our city council, at least 80 percent of them, plut a city manager, have not been doing their job. Newton you have come a long way since you first ran for a city council seat, and I hope you will give it a try again when the opportunity presents itself.
How much money do you think was and is involved in this surcharge tax mistake?