HARLINGEN — A state audit has led to the deduction of $257,196 in sales tax revenue from the city’s coffers.
The comptroller’s office has deducted the money from the city’s monthly sales tax collection after the audit found a business had paid sales taxes on equipment from April 2013 to October 2016 despite its tax-exempt status, said Kevin Lyons, an agency spokesman, adding the state keeps taxpayers’ identifies confidential.
“The state determined the taxpayer shouldn’t have accrued tax on equipment that was tax-exempt,” Lyons said. “This business thought they should be paying taxes when they shouldn’t have been. This happens often.”
At City Hall, City Manager Dan Serna said the comptroller’s office has apparently audited other cities.
But the city’s audit marked the first he could remember, he said.
“The comptroller’s office does periodic audits,” Serna said. “I don’t know if this is a routine audit. We’re waiting for the information to get a better idea of the scope of the audit.”
As a result of the audit, the comptroller’s office deducted $257,196 from the city’s December sales tax revenue, slashing the city’s biggest monthly sales tax collection to $2.47 million, compared with $2.99 million last year.
“We’ve asked for a detailed report from the comptroller’s office on that sales tax information,” Serna said. “We want to know what it stems from.”
Serna said he’s working to try to offset the loss.
“We’ll monitor our budget through the year to see if we need to make adjustments,” he said, referring to the city’s $47.8 million general fund budget. “Finance is reviewing any potential savings that might offset that.”