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<br /> <br />STAFF REPORT <br />CENTERVILLE CITY COUNCIL <br /> <br />Date: <br /> <br />October 8, 2003 <br /> <br />To: <br /> <br />Honorable Mayor and City Council Members <br />Ms. Kim Moore-Sykes, City Administrator <br /> <br />From: <br /> <br />Ellen Paulseth, Finance Director <br /> <br />Re: <br /> <br />Sales tax audit <br /> <br />************************************************************************ <br /> <br />The Department of Revenue has just completed a random sales tax audit for the City of <br />Centerville. The scope of the audit was for three years. Therefore, the audit period <br />included the years 2000, 2001, and 2002. Results of the audit are as follows: <br /> <br />Period <br /> <br />Tax <br /> <br />Interest <br /> <br />Total <br /> <br /> <br />Year 2000 <br /> <br />$ 467.81 <br /> <br />$ 87.94 <br /> <br />$ 555.75 <br /> <br />Year 2001 <br /> <br />$ 749.04 <br /> <br />$ 74.90 <br /> <br />$ 823.94 <br /> <br /> <br />Year 2002 <br /> <br />0.00 <br /> <br />A substantial portion of the tax due accumulated through purchasing supplies from out- <br />of-state vendors-who do not charge Minnesota s~lp.!:l tax. In other cases, tax was due <br />where vendors did not properly itemize parts and labor, resulting in use tax due on the <br />entire invoice. In a few cases, vendors assumed that the City was tax exempt. The City <br />is responsible for paying use tax on all invoices where insufficient or no sales tax was <br />collected. As shown in the year 2002, staff is closely monitoring invoices for sales tax <br />due. <br /> <br />We have reviewed all invoices in questions and have come to a point where we agree <br />with the Department of Revenue on the amount due. Council should authorize the <br />appropriate person to sign the attached Form DOR 51 and authorize the payment of the <br />amount due. <br />